The company seems to be getting back on the right track with the launch of the new chip

Nov 15, 2008 08:54 GMT  ·  By

Advanced Micro Devices released its latest server chip, code-named Shanghai, two days ago, and reviews and testing results emerged to the web the very same day. Since the chip proved to rise to the expectations, analysts already say that AMD has good chances to give Intel something to worry about. AMD's new quad-core Opteron CPU comes under the 45nm process technology and, although it arrives a year after the first Intel 45nm chips, it has the ability to make its manufacturer competitive again. The future chips the company already announced it planned to release are also expected to make a stand.

"This shows that they are back on track and have regained their footing," said Jim McGregor, an analyst at In-Stat in Scottsdale, Ariz, when talking about Shanghai. "This is critical for AMD. They're rebuilding credibility. … This makes them more competitive at a critical time – right before Intel comes out with Nehalem."

AMD managed to roll-out Shanghai a few months earlier than previously expected, another sign that it has made great progresses lately. As many of you can easily recall, AMD spun off its manufacturing facilities into a separate entity named The Foundry Company. Moreover, AMD has also been through a series of executive shake-ups this summer, with its CEO Hector Ruiz being replaced by Dirk Meyer at a time when the company was announcing its seventh consecutive quarterly loss.

The chip manufacturer has registered several bad quarters the past two years or so, and it was going down pretty fast. Even so, it managed to roll-out competitive products on the graphics market as well as in the central processing unit segment. Shanghai will not have a match for a while, since Intel plans to release a server version of its upcoming Core i7 processors based on the next-generation Nehalem micro-architecture.

"AMD was very smart in not only delivering Shanghai around two months early, but they also delayed the big announcement until they had units in hand and [were] shipping," said Dan Olds, principal analyst at the Gabriel Consulting Group. "I'm always saying that AMD has to execute, and they did it with this product. I believe this gets them back into the game with Intel. This chip should be competitive from both a pricing and performance standpoint and puts AMD at parity with Intel, at least for the short term."

AMD's Shanghai made a good impression last month as well, when the company allowed PC makers to take an early look at the chip. "The OEMs seemed to be pretty happy with it," said analyst Rob Enderle of the Enderle Group back then. "It's showing up ahead of schedule, and it seems to be performing well against expectations."

"I estimate that [AMD] once owned maybe a third of the server market share in the Opteron glory days," said Olds. "However, Intel made a furious comeback with quad-core chips and probably reduced AMD's share to around 10% of the server market. This should give AMD a chance to get some of that back. They won't have the huge advantage they had over Intel in the glory days, but they are now competitive."