By John G. Spooner and Michael Kanellos
Wednesday, August 18 2004 11:03 AM
URL: http://www.zdnetasia.com/news/hardware/0,39042972,39190454,00.htm

Advanced Micro Devices says it has reached a chip manufacturing milestone that will lead to improvements across its range of processor offerings for PCs and servers.

The chipmaker confirmed on Tuesday that, as previously reported, it has begun manufacturing chips using its new 90-nanometer process, meeting a deadline set after earlier delays. At the same time, it revealed that the first of those processors to appear in a PC will be members of a family of low-power mobile Athlon 64 chips, due to show up in notebooks in "coming months," a company representative said.

Generally, shifting manufacturing processes--in this case moving from a 130-nanometer process to one that turns out chips whose average internal feature size is 90-nanometers--enables chipmakers to boost performance by packing more transistors into each chip. The shift can also cut costs and power consumption, depending on the design and other circumstances.

It's not easy. IBM and Intel have had difficulties in getting their 90-nanometer chips out the door on schedule and in producing sufficient chip quantities. Likewise, AMD originally was supposed to start producing 90-nanometer chips late last year, and the company has adjusted its release schedules to push some 90-nanometer chips back to 2005.

The first wave of mobile Athlon 64 chips, which are based on a processor core code-named Oakville, use the process to reduce power consumption. A source familiar with the chips said they will average about 31 watts, a reduction of about 10 percent from AMD's existing low-power mobile Athlon 64s.

Later this quarter, AMD will begin turning out 90-nanometer Athlon 64s for desktop PCs, the company said in a statement. Although it's still unclear what model numbers the 90-nanometer desktop chips will come with--AMD representatives declined to provide any specifics--the chipmaker is likely to use the process to boost the performance of the desktop line.

Beefing up Athlon 64 via its manufacturing "puts (AMD) in a better competitive position, as the greater number of Athlon 64s it has, the better it can compete (with Intel)," said Dean McCarron, principal analyst at Mercury Research. "The total available market (AMD) can address by using Athlon 64 is greater than it is with just Athlon XP." Although Intel has made efforts to box in the Athlon XP as a low-price chip, "There's no boxing (Athlon 64) in. It's a directly competitive product."

AMD will also begin making 90-nanometer Opteron server chips later in the year, the company said in its statement. It's likely to use 90-nanometer manufacturing to create both higher-performance Opterons and also lower-power versions of the chip--not unlike its plans for notebooks.

Finally, AMD will produce 90-nanometer versions of Sempron, its processor for low-price PCs using the 90-nanometer process, during the first half of 2005. Thus, all of AMD's processor lines will have at least some 90-nanometer offerings by the first half of next year.

The manufacturing transition will also be an important one for AMD's bottom line. The ability to reduce the size of its chips will allow AMD to produce more of them, at a lower cost per chip--two things that affect its quarterly revenue and profits, analysts said. Because Intel is already making 90-nanometer chips, it currently enjoys a size advantage.

"What really needs to come down is die size (or the size of each chip)," said Kevin Krewell, editor of the Microprocessor Report. "Certainly, a shrink on Opteron should bring it down to about 120 millimeters or 130 millimeters square, which is much more cost-effective to manufacture (than today's 193-millimeter square size). More units also equal more revenue and profits. I think right now, (AMD) is probably limited not so much by Intel but by manufacturing."

The move to 90 nanometers will also help AMD in its plan to deliver dual-core processors as well, the company said. Dual-core chips incorporate two separate processors into a single chip, lending desktop and notebook PCs an additional processor and thus boosting their performance. AMD plans to deliver dual-core chips in the middle of 2005, the company has said.

Still, the fact remains that AMD isn't the only chipmaker to have made the move to 90 nanometers. Its main rival, Intel, has been producing 90-nanometer chips since late 2003. Those chips have been available in PCs since the introduction of Prescott, Intel's latest Pentium 4, in February. All of Intel's PC processor lines, including the Pentium 4, the Pentium M and the Celeron, now have at least one or two 90-nanometer processors inside them. IBM has also been producing 90-nanometer chips for its own consumption and for customers such as Apple Computer.

Although AMD has met its most recently imposed deadline for shipping 90-nanometer chips, the company had originally aimed for a 2003 introduction. Oakville wasn't even the first scheduled 90-nanometer chip. Last year, it was supposed to be part of a second generation of 90-nanometer chips coming out at about this time. Odessa was supposed to be the company's first 90-nanometer chip, but it got refashioned into a 130-nanometer chip.

Further delays are coming. San Diego, a 90-nanometer version of the Athlon FX chip for gamers, has been pushed from the second half of this year to the first half of 2005. Trinidad, a code name for a notebook chip earlier expected in 2005, vanished from the published release schedule.