Intel Rival AMD Launches 64-Bit Chip

<br>SAN JOSE, Calif. (AP) _ In the biggest gamble of its 33-year history, Advanced Micro Devices Inc. on Tuesday launched a high-powered microprocessor that aims to offer server makers an alternative to

Tuesday, April 22nd 2003, 12:00 am

By: News On 6

SAN JOSE, Calif. (AP) _ In the biggest gamble of its 33-year history, Advanced Micro Devices Inc. on Tuesday launched a high-powered microprocessor that aims to offer server makers an alternative to rival chip-maker Intel Corp.'s chips.

During the chip's formal unveiling in New York City, International Business Machines Corp. said it would offer a server based on the AMD's new Opteron processor. Microsoft Corp., meanwhile, repeated its promise to offer a version of Windows optimized for the chip.

A number of smaller vendors also announced support for Opteron, which can process data in 64-bit chunks instead of today's 32-bit standard found in most of today's midsize servers.

It's a new approach for AMD, which has mostly followed Intel's lead in the semiconductor industry. Unlike Intel's 64-bit Itanium processor, the Opteron can run today's 32-bit programs without suffering a hit in performance.

``Today, 64-bit computing is available to everyone. There are no more barriers,'' said Marty Seyer, vice president of AMD's server business. ``AMD has set a new standard for price performance. And we have reduced the cost of computing significantly ... With the AMD Opteron processor, we have changed everything.''

Still, AMD faces considerable obstacles. For one, the firm best known for its Athlon processors for personal computers must prove itself as a reliable supplier for enterprises. And, despite financial difficulties, it must continue to improve upon the chips.

If successful, AMD could crack the lucrative high-end server market. From there, the company hopes to cascade chips to other uses, from laptop computers to supercomputers.

``(AMD) is truly becoming a broad-based supplier in the computing industry,'' said Hector Ruiz, the company's chief executive. ``To me, it's the pinnacle the company has been trying to reach for quite some time.''

The IBM promise is significant but not unexpected. Earlier this year, the companies said they would work together to develop new chip technologies. AMD and IBM also collaborated to create technology used in Opteron.

And Microsoft Corp. is not expected to release a beta version of Windows for Opteron until this summer. Today's 32-bit Windows will run on the chip but will not take full advantage of its capabilities.

AMD also faces financial trouble, reporting last week a $146 million loss on $715 million in quarterly sales. It has repeatedly cut costs and recently axed 2,000 jobs in an effort to return to profitability.

Such news casts a shadow over the new chip, which seeks to attract big server makers that require stability from their suppliers over the long haul.

``The success of Opteron is really going to be not so much a question of performance at this point in time but of the ability of AMD to sustain that performance because the market is not static,'' said Thomas Thornhill, an analyst at UBS Warburg.

``There have been numerous cases of processors that have been introduced to market at a point and time where they offered performance advantage but never achieved critical mass to maintain the required reinvestment in R&D,'' he said.

AMD, which has a history of big gambles, currently offers 32-bit chips for servers. But that has not been a significant sales generator.

The 64-bit chip market is dominated by Sun Microsystems Inc., IBM and Hewlett-Packard Co., which spent 10 years with Intel developing a 64-bit processor called Itanium. Such chips have been used mainly in large industries to process huge amounts of data.

AMD has its eye on those markets but will be initially targeting the same mid-range markets now dominated by Intel's 32-bit Xeon server chip family.

Opterons, ranging in speeds from 1.4 gigahertz to 1.8 GHz, will be priced from $283 to $794 when purchased in volume. By comparison, Intel Xeon chips of speeds from 2.4 GHz to 3.06 GHz range in price from $198 to $722. The least expensive Itanium 2 processor costs $1,338.

Ultimately, Opteron's focus will cascade to other areas, Ruiz said. In September, AMD will launch a 64-bit chip for consumers called Athlon 64.

``Eventually we expect the technology to waterfall down into workstations, desktops and laptops and, over time, be fairly pervasive not only in commercial and enterprise applications but also for the consumer,'' Ruiz said.