Analysts: AMD Shanghai chip gets thumbs-up from OEMs

Chip maker ships out new 45nm quad-core processor to vendors for early look-see

Hardware vendors, which are just getting a first look at AMD's next-generation server chip, are giving the Shanghai processor an initial thumbs-up, analysts say.

Advanced Micro Devices is hoping the new hardware can help it rebound from the struggles that bogged down the company after it delayed the release of the Barcelona chip. The eight-month delay, caused by a glitch in the processor, lost the company market share, as well as mind share, prior to Barcelona's ultimate release last spring.

Since then, AMD has been trying to get back on its feet, put its financial troubles behind it and get back in the game with archrival Intel.

An AMD spokesman confirmed Wednesday that the company has started shipping production quality Shanghai chips to OEMs so they can make final validations.

Industry analysts say that shipping the quad-core server processor - the company's first 45-nanometer chip -- to OEMS for an early look-see is a very good sign for AMD. The new Shanghai chip was originally scheduled for release in the first quarter of 2009, but AMD has pushed the ship date ahead to the fourth quarter of this year.

Rob Enderle, an analyst at Enderle Group, said that when Barcelona was in the works, AMD executives were distracted by the chipmaker's acquisition of ATI Technologies during 2006. Now, with the acquisition settling in and new leadership at the helm of the AMD, the focus is back on processors.

"The combination of the higher level of focus and the less risk that they're taking is resulting in them beating their own date," said Enderle, noting that the Shanghai chips may be cast on a new 45nm die but architecturally are quite similar to Barcelona. "Right now, the OEMs seemed to be pretty happy with it. One, it's showing up ahead of schedule and it seems to be performing well against expectations. We're still at the front end of sampling, so we won't know how well it's performing for a few weeks yet but so far the OEMs like what they've seen," he added.

Dan Olds, principal analyst with the Gabriel Consulting Group, said an OEM told him that after an evaluation, it plans to use the chip in systems. "I think we're beyond the 'looking/evaluation' stage and into the 'let's build the systems that will use it' stage," he added. Olds noted that the vendor, which he declined to identify, plans to ship Shanghai-based systems as early as the fourth quarter of this year, but possibly in the first quarter of 2009.

While it's good for AMD to get Shanghai out on or ahead of schedule, it's also very good for the company to catch up to Intel in the 45nm race, noted Dean McCarron, an analyst at Mercury Research. Intel came out with its first 45nm processor family -- Penryn -- last November, a year before AMD's first 45nm chip.

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