By Stephen Shankland
Tuesday, September 27 2005 03:22 PM
URL: http://www.zdnetasia.com/news/hardware/0,39042972,39259178,00.htm

Advanced Micro Devices plans to announce faster new models of its dual-core Opteron processor on Monday, an attempt to stay ahead of rival Intel in the market.

The company is introducing its Opteron 180, 280 and 880, which are 2.4GHz chips geared for computers with one, two and up to eight processors, respectively, said Randy Allen, corporate vice president of server products at Sunnyvale, Calif.-based AMD. Dual-core chips have two processing engines on a single slice of silicon. They are now are arriving in the mainstream market for servers based on x86 processors from AMD and Intel.

In April, AMD introduced Opteron processors with dual cores, or processing engines, and the chips are used in machines from Sun Microsystems, Hewlett-Packard and IBM--three of the top four server sellers. Intel has numerous dual-core and multicore processor designs under way, but its first dual-core server chips won't be released until later this year.

AMD has gained market share against Intel with Opteron. But Merrill Lynch analyst Joe Osha expects Intel will fight back with pricing, keeping AMD's profit margins from growing.

The previous Opteron dual-core models topped out at 2.2GHz--all except for a small number of 2.4GHz "special edition," or SE, models, that consume more power. So far, only Sun has used the SE chips, which consume 120 watts compared with 95 watts for the ordinary Opterons.

Keeping limits on power consumption is crucial to make sure servers don't overheat or overtax data center electrical and cooling gear. Having ordinary Opterons running at 2.4GHz erodes the advantage that Sun currently has with its new Opteron-based Galaxy server line, which uses the SE chips.

"Sun, for at least two weeks, had bragging rights about that," Insight64 analyst Nathan Brookwood said. That advantage might have been more substantial if Sun had released Galaxy on the schedule it had hoped--a full product family out by June.

But Sun's 120-watt-capable design could get the edge again as AMD works on faster speed grades. More SE models are possible, Allen said: "I would fully expect us to pursue those kinds of opportunities in the future."

AMD assigned the prices of its former top-end chips to the new models. In 1,000-unit quantities, the model 880 costs US$2,649, the model 280 US$1,299, and the model 180--which won't ship for another 30 days--US$799.

The chipmaker has changed its pricing strategy ever since introducing the Opteron line in 2003, leading x86 chips into the 64-bit realm instead of playing catch-up to Intel. "The old AMD used to sell its chips at a 25 to 50 percent discount to what Intel was charging. The new AMD more or less prices at parity (to Intel) and delivers higher levels of performance," Brookwood said.

The dual-core prices are the same as for top-end single core prices, too, despite those parts' lesser performance. "That incentivizes our customers and partners to make the transition to dual-core in an expeditious manner," Allen said.