ZDNet UK / News and Analysis / Workspace IT / Processors

AMD narrows Intel gap, boosts Hammer

By Michael Kanellos, CNet, 1 May, 2002 08:44

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Intel, tech update, x86-64, hammer, megahertz, Itanium, Clock speed, Athlon, Processor, AMD, Opteron

NEWS
AMD gained a bit of ground on Intel in the first quarter, bolstered in part by growth in the markets for notebook and server chips, according to a research study. The company also announced speeds of its upcoming Hammer chip at a conference in San Francisco. In the first quarter, Intel accounted for 80.8 percent of the worldwide shipment of processors for PCs, a drop of 0.4 percent sequentially. The figures include shipments of chips for Microsoft's Xbox game console. AMD accounted for 18.2 percent of shipments, an increase of 0.2 percent sequentially. The remaining 1 percent of shipments came from other processor makers such as Via Technologies. The figures, from Mercury Research analyst Dean McCarron, do not include PowerPC shipments to Apple Computer. Meanwhile, AMD's chairman, Jerry Sanders, told an audience at Merrill Lynch's Hardware Heaven conference in San Francisco that Hammer, the company's forthcoming chip for desktops and servers, will debut at 2GHz or higher. Hammer will ship to PC makers in the fourth quarter and will be released to the public in the first quarter of 2003, Sanders added. The market share figures, to some degree, reflect the increased success AMD is having in penetrating the notebook and server market. Approximately 10 percent of AMD's processors in the first quarter went into notebooks, according to AMD. The company also claims it accounted for 6 percent of all server chips sold in the United States. While McCarron couldn't confirm those figures, he stated that the company is gaining in these markets. Less than a year ago, AMD had no presence in the server market, he noted. Concurrently, Intel benefited from sales of chips for the Xbox, a contract both companies sought. Without Xbox, Intel's market share in terms of shipments dropped 0.8 percent to 79.8 percent while AMD's market share rose 0.7 percent to 19.2 percent, according to Mercury. Although AMD is currently unprofitable, Sanders said it will continue to gain on Intel. Along with eking out more ground in servers and notebooks, the company will make a push into China and other emerging markets where Intel remains dominant. "We see Asia-Pacific -- which has been carrying our competitor -- as an opportunity," Sanders said. "We do expect to grow our revenue and gain market share in 2002." Hammer will also begin to have an influence late in the year. The chip is capable of running 32-bit programs -- the kind used on most desktops today -- as well as 64-bit applications for servers. Last week, Microsoft said it planned to incorporate extensions into Windows so that it would run as a 64-bit operating system on Hammer. Effectively, this will allow Hammer to compete against Itanium, Intel's 64-bit chip. "For the first time, we have a product to compete against Itanium," said Sanders. "Without Microsoft's support, AMD would obviously not be able to go to the enterprise space." The flamboyant company founder went on to proclaim that Itanium would fail and that Intel would have to come out with a similar 32/64-bit chip to placate Dell Computer. Hammer is compatible with current applications; Itanium uses a separate architecture that requires a completely different set of software. Incompatibility will hinder acceptance, according to Sanders and some analysts. Itanium will also cost more to make, Sanders alleged. "The Intel Itanium will be a failure because it doesn't obey the immutable laws of our industry," Sanders said. "There are only two outcomes: 1) Dell will adopt Hammer, or 2) Intel will come out with an x86-64 (processor)." An Intel representative, while declining to comment on any 32/64-bit chip developments, said that Itanium enjoys broad support in the industry and will provide a new level of performance in the server market. "The industry needs a real 64-bit solution that provides all of the scalability and reliability that server manufacturers need. Intel delivers that," the representative said. The Hammer-Itanium argument will likely be one of the big debates of the year in the processor market. To date, Itanium has not sold well because of weak performance and a lack of software, according to PC executives and analysts. A new version of the chip, code-named McKinley, will hit the market midyear at 1GHz, along with more software. While even Intel expects the adoption of McKinley to be gradual, it doesn't necessarily portend a shift to Hammer. IBM, Hewlett-Packard (which co-created the Itanium architecture) and others have already heavily invested in building Itanium servers. These companies also have yet to adopt AMD chips for the mainstream corporate desktop market, let alone the more conservative server market. The wild card, potentially, is Dell. Dell executives have been openly sceptical about the demand for Itanium. Dell also retired an Itanium-based workstation from its product line. At the Merrill Lynch conference on Tuesday, chief executive Michael Dell said the company is looking at Hammer and is interested in it. He even engaged in jovial banter with Sanders. However, Dell has regularly tested AMD's chips and never adopted them for a product. "We're very interested and we're looking and there's not much more to say about it in public," Dell said at the conference. In any event, Sanders said that at least Intel will not be able to tout larger megahertz numbers. With Hammer debuting at speeds of at least 2GHz, the chip will run faster than McKinley. Intel will thus be stuck trying to argue that megahertz is important in the desktop space, where it will likely be ahead, and that megahertz is not important in the server space, where it won't be. "You can't have it both ways," Sanders said. Hammer will be marketed under the Athlon brand for the desktop and notebook market and under the Opteron name for the server market. It will be given a performance rating number (an AMD rating) of 3400.
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