On the comeback trail

AMD has been through quite a few upheavals in its history including the recent layoffs. It has often been at the receiving end in an industry where there are but two significant manufacturers, with its competitor Intel enjoying an obscene market share. Battered by a resurgent Intel and product delays, AMD has struggled to turn a profit in recent quarters. Yet, the company has consistently been at the forefront of manufacturing innovations that has helped it hold on to its market presence.

It was the first to introduce 64-bit computing into the PC industry on both desktop and the server front, while Intel caught on later. That had given AMD a huge advantage in the server market where performance was King. Its first generation Opteron processors helped AMD establish a significant foothold in the server market but the company was guilty of slowing down on other fronts, with delays on processor shipment sechdules and not being able to push ahead further. Intel came back stronger and with new architectural announcements and embraced 64 bit computing.

As recently as last year, AMD disappointed with its Barcelona chip, whose shipments also started after a protracted delay. Barcelona was the quad-core Opteron processor that AMD started shipping in volume in April. Announced in 2006, mass shipments of Barcelona were delayed after bugs were detected in the cache memory. Some customers turned to quad-core processors from Intel in the meantime. That seemed to dent AMD’s credibility in the server market. However, now AMD seems to have come back with a new quad core new generation Opteron processor called ‘Shanghai’. AMD is seeking to rebuild confidence among customers with its new processor.

Jochen Polster, Director Sales for AMD EMEA says, “Shanghai is the new server product from AMD and manufactured on 45 nm process. It brings several improvements over Barcelona including increased cache size, increased support for virtualisation and there are other several substantial improvements.”

The chip's launch comes just a few days before Intel launches its next-generation Nehalem chip. Like Shanghai, Nehalem integrates the memory controller into the CPU.

Shanghai for now will not compete with Nehalem since the two chips are aimed at different systems. Shanghai is targeted at servers, while Nehalem is for high-end desktops, IC Insights' Lineback said. Competition between the companies may intensify when Intel releases Nehalem server chips, though a launch date hasn't been announced yet.

While AMD is enthusiastic about its new server product that presumably delivers 355 more performance, analysts are suggesting that with the economic downturn making its presence felt, this may perhaps not be the most opportune time to launch a new chip.

Besides, AMD needs to prove that indeed it has avoided the hiccups it encountered with Barcelona. AMD claims that it has indeed taken it through tougher testing and the vendor also cleverly brought in OEM partners early into the process, which it claims has helped it take the process through smoothly.

Running at 75 watts, the Shanghai processors range in speed from 2.3GHz to 2.7GHz. The chip also includes improved hyperthreading for faster application performance. Shanghai chips running at 55 watts and 105 watts will be launched in the first quarter of 2009.

Manufactured using the 45-nanometer process, Shanghai chips are more power-efficient than Barcelona, which were manufactured using the 65-nanometer process. New CPU (central processing units) designs allow Shanghai to turn off unused functions or shift processing duties to save power. It also provides more power savings when servers are idle compared to earlier processors. The chips are 20 percent faster than Barcelona and can be easily plugged into the same socket that supports Barcelona chips now.

Emilio Ghilardi, Senior VP and GM, EMEA says, “Power consumption is one of the key concerns with CIOs and datacentres. This company has been doing continuous innovation and we are doing this ahead of schedule. Shanghai is shipping one quarter earlier than planned.”

He cited research figures from IDC during his presentation at the Berlin launch event highlighting the relevance of power savings. In the last 10 years, cost of Energy quadrupled (424%) and in a lifespan of 3 years, this amount expected to increase another 25%. Last year, in 2007, cost for power and cooling surpassed 50% of the system price already. Not surprisingly, energy efficiency will become one of the key priorities for data centres further ahead.

Polster adds, “We do a lot for energy saving innovations in our architecture. Computing centres, web hosting centres tend to have a lot of servers and they are very concerned about power consumption. For the past four-five years, across our server product lines, performance has been increasing with more cores, higher frequencies but the power envelope has remained the same. So there is no need to redesign the way you pool your centre plus the idle power in many instances of applications where the processors are found idling, is coming down.”

At the launch event, Leslie Sobon, Vice President Worldwide Product Marketing spoke about transition from Growth to Savings economy and the need for incorporating new technologies.

With the new repositioning that the future is Fusion, the company says it is delivering leading server performance against real-world workloads with best-in-class performance-per-Watt and powerful virtualization capabilities. The new processors deliver faster “world switch” time, which enhances virtual machine efficiency, and feature improved Rapid Virtualization Indexing that reduces the overhead associated with software virtualization.

Sobon adds, “We are hearing from organisations that virtualisation in addition to energy efficiency are key to cost savings. Our customers have been asking for more performance, less power consumption. Any innovation has to specifically impact the bottomline. We continue to lead in power efficiency and the new processors deliver 35 % more performance with increased cache, enhanced virtualisation capabilities, increased performance in the same power envelope at the same cost and with easy migration and infrastructural compatibility. There is no risk of an architectural change because now is not the time for an architectural change.”

The company claims that the processor will excel at driving next-generation workloads. It is also likely to be more widely available than its predecessors with 25 OEM products available in Q408. Dell and HP have already started shipping servers in the region based on Shanghai. On its roadmap, AMD intends to follow Shanghai with Istanbul, a six-core processor in 2009, followed by the twelve-core Magny-Cours in 2010. That is a story for another day.

For the moment though, it does seem that the embattled manufacturer has done well to execute the new launches well within the promised time frame. And it has also scored with quick launches from its OEM vendors. That augurs well for the company that has reinvented itself recently by divesting its manufacturing operations into a separate company called ‘The Foundry’ with its strategic partner, the Advanced Technology Investment Company (ATIC) of Abu Dhabi in a deal valued at $2.1 billion.

While the deal should make life easier for AMD, relieving the company from the financial burden of maintaining its own plants, the manufacturer is now counting on new ATI graphics chips and its Shanghai server processor to turn things around.