Advanced Micro Devices Inc. has gained crucial backing from Microsoft Corp. for its forthcoming family of 64-bit chips, code-named Hammer, the company announced Wednesday. The chip maker also revealed that server and workstations versions of the chip due in the first half of next year will take the brand name “Opteron.”
Microsoft is working with AMD to offer a version of its Windows operating system for AMD’s new chips, which will compete primarily with Intel’s Xeon and Itanium processors, AMD said. Intel already has secured Microsoft’s backing for its own family of 64-bit chips, and gaining support from the software giant is an important step for AMD as it tries to take make inroads against Intel in the server market, analysts said.
“It is a very important step forward in terms of gaining industry support for (AMD’s new chip architecture),” said Nathan Brookwood, principal analyst with Insight 64, in Saratoga, Calif. However, he added, “it does not by itself ensure the success of the product. “
AMD also needs the backing of enterprise software vendors such as Oracle Corp. and SAP AG, which will need to retune their applications to take full advantage of the new AMD chip architecture, dubbed x86-64. Those vendors will have little incentive to do that unless they think major server vendors will also climb on board, creating “a little bit of a vicious circle” for AMD, Brookwood said.
If AMD could make inroads in the server market it would probably benefit customers by sparking a new level of competition, he said, adding that he has “a lot of regard” for AMD’s chip technology.
Dean McCarron, president of Mercury Research Inc., in Scottsdale, Ariz., called Microsoft’s backing “significant by way of example.” Support from the Redmond, Washington, software maker is a vote of confidence that will encourage software developers to look more closely at AMD’s server offerings, he said.
In a teleconference to discuss the agreement, AMD officials wouldn’t say which Windows products would be tuned to work with its new chip, and Microsoft officials were not on the call. The work with Microsoft has been under way for “many months” and specific product plans will be disclosed later in the year, said Dirk Meyer, an AMD group vice president.
The company plans Thursday night to show to financial analysts in New York a prototype server powered by two Opteron chips, which will be running a “developmental” 64-bit version of Windows, he said.
The Sunnyvale, Calif., chip vendor has long played second fiddle to Intel in desktops and notebooks, although analysts say its share of that market has increased somewhat since the release of its first Athlon processor in 1999. Intel has retained a tight grip on the high-volume server market, however, where AMD’s chips appear for the most part in unbranded “white box” systems.
Still, in reporting the company’s first-quarter financial results last week, AMD officials reported a “substantial” uptick in sales of the server version of its Athlon processor and claimed to have sold some 100,000 units of that chip during the quarter, McCarron noted. “That’s a fraction of what Intel does … but it’s not noise anymore, it’s a measurable number,” he said.
Intel has a head start with its 64-bit chips and already has secured backing from some of the largest server and enterprise software makers. Its first Itanium chip, which went on sale in servers and workstations last year, was met with a somewhat cool reception, but a follow-up version known as McKinley is expected to offer significant performance gains when it goes on sale in the coming months.
The first Opteron chips will begin shipping in the first half of 2003, AMD said. The family will include 64-bit chips for one-way and two-way workstations and servers, which were formerly code-named Clawhammer, as well as offerings for two-way to eight-way systems, formerly known as Sledgehammer.
A version of the chip for desktops and notebooks will appear in the fourth quarter of this year under the existing Athlon brand, AMD said.
During the conference call, AMD officials confirmed reports that the company plans to scrap in 2003 its Duron brand, which is aimed at low-cost PCs and competes with Intel’s Celeron processor. Athlon will become the brand for all of AMD’s desktop and notebook chips, although higher performance versions will probably be distinguished by a suffix to the name, Meyer said.
Opteron and Itanium both are families of 64-bit processors. Roughly speaking, that means they process data in chunks that are 64 bits long, compared with the 32-bit chunks widely used in PC chips today. The ability to address larger amounts of data makes the chips better suited to running enterprise software such as databases and ERP systems, and AMD and Intel both are looking to move into more lucrative, higher end markets.
Both vendors are challenging Sun Microsystems Inc., IBM Corp. and others, whose 64-bit RISC processors have been the mainstay of large servers for many years. Intel and AMD hope to convince customers that they can equal the performance and reliability of RISC chips at a lower price, though analysts have said that remains to be seen.
Not surprisingly, AMD claims that Opteron will be superior to Itanium. The chip family builds on the classic x86 architecture, which means it will run today’s 32-bit applications without compromising performance, as well as 64-bit programs, according to AMD. The strategy is to provide a gradual upgrade path for customers who want to transition gradually to 64-bit systems. Intel’s Itanium chips, by contrast, won’t run 32-bit applications as well as its existing 32-bit processors, Brookwood and McCarron said.
As part of tomorrow’s demonstration in New York, AMD will also show a prototype desktop PC running a 64-bit Athlon processor and a standard, 32-bit version of Windows XP, officials said. The idea is to demonstrate the chip’s backward compatibility.
AMD officials said its 64-bit chips will offer a performance boost for desktop and server users even if they are still running 32-bit applications. The gains will be most apparent to server customers, but some desktop applications, including games, should also benefit from the new architecture, Meyer said.
The name Opteron comes from the Latin optimus, meaning “best,” and also is meant to suggest that customers have “options, in terms of flexibility and choices,” AMD said in a statement.
“I think people make a lot of fuss about names, and within a couple weeks the name fades into the background,” Brookwood said. “It’s a lot like naming a kid.”
The Opteron chips will be manufactured initially at AMD’s Fab 30 facility, in Dresden, Germany, using a 0.13-micron manufacturing process. They will be offered in two packaging types: 754-pin organic and 940-pin ceramic micro, AMD said.
