Microprocessor and graphics processor chip maker AMD let slip that its new Shanghai version of the Opteron processor is actually ahead of schedule for production. Samples are available now for testing and it may begin appearing on servers as early as Q4 of this year.
AMD was doing well in its efforts to become a true rival to Intel until the Barcelona version of Opteron ran into problems. It came out over a year late. It had some merits: the four core version had all four cores on a single chip. Intel's four-core Xeon server processor actually was two two-core chips packaged together, which resulted in a variety of performance issues.
The Shanghai Opterons will also have four cores, but they will be on a 45nm process enabling them to have larger internal memories (caches) and other acclerators that were not present in the Barcelona versions, which were done with a 65nm process.
In looking at Q3 2008 results, which will be released October 16, we will be seeing the results of revenues from the current generation of Opteron processors. This generation has its merits, and may have sold well into energy conscious server customers. But if there is a surpise bump it will be from the recently reinvigorated ATI graphics unit, which came out with highly acclaimed products that may have sold very well in Q3. Notebook CPU and graphics chips, which were once a weakness for AMD, also should be showing a strengthening trend.
So if Q3 was better than expected, and Shanghai starts shipping in Q4, and the economy does not melt down, AMD investors will have something to cheer about for the first time since 2005. Given the almost vanishingly low current market capitalization for AMD, that might generate quite a pop.
Then again, I am a long-term investor in AMD, so this analysis could just be wishful thinking.
For more data see my AMD page and www.amd.com
For the technical news article on Shanghai see AMD says new 'Shanghai' chip is ready to go by Brooke Crothers at CNET.
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Showing posts with label xeon. Show all posts
Showing posts with label xeon. Show all posts
Tuesday, September 30, 2008
Wednesday, September 12, 2007
AMD, Quad Core Opteron, and Korea
This has been an exciting week so far for those of us following the Processor Wars. Intel announced it is making more money than it thought it would. Korea announced (See Infoworld article) that it thinks Intel used illegal methods to make its dough, joining Japan and the European Union in that allegation. AMD released its genuine quad-core Opteron processors, to be distinguished from Intels dual-dual core Xeon processors. Preliminary reviews have already started emerging for the new AMD processors; they look amazing. Since this blog is primarily for investors, I'll be converting some tech-speak to a semblance of why this matters in reality.
First, as far as I know, all AMD executives and employees are alive and well, so the boys at Intel have been too busy trying to catch up with AMD advanced technology to watch the Sopranos. Their unethical business methods will doubtless be considered by Intel investors to be mere sharp business practices. Essentially what Intel is accused of by Japan, Europe, and Korea is limiting AMD to very small markets by illegally discouraging dual sourcing of processor chips. Intel says it never did this, and if it did it stopped doing it. And my understanding is that nothing Intel did, would, in itself, be illegal. You can price your products however you want. It is the context that matters: pricing schemes can become illegal when they are designed to create a monopoly. Intel's main defense is look, we lost market share lately, we can't be a monopoly. But they lost market share after two changes: AMD introduced 64 bit x86 processors when Intel tried to force its clients to switch to Itanium processors in order to get 64 bit, and Intel was informed by regulatory agencies that it was being investigated.
In 2006 Intel was on the ropes and responded by taking advantage of its capital position. It started a pricing war that benefited computer makers (Dell, HP, etc.) and consumers but that drove AMD to the wall. In the later half of 2006 Intel released a new processor design that showed some improvement on older designs. This happened while AMD was trying to absorb its acquisition of ATI, which simply put it in position to get its ass kicked by NVidia and Intel at the same time.
Today AMD's stock price is below its 2002 level, even though it is a much larger company now. 2007 revenues look to be roughly double those in 2002. Earnings are bad, in fact negative, because of the pricing war with Intel and the cost of the ATI acquisition.
But that is the past; the future depends on industry adoption of Barcelona technology, particularly the quad core Opteron processor for servers. Unlike when Opteron was introduced (no major players joined in the introduction), IBM, Dell, and HP all are ready with quad-core Opteron servers. These processor chips can also be plugged into AMD-based servers that have been selling in 2007 because they are pin-compatible with the dual-core Opterons. I doubt many companies will be pulling out dual-cores to put in quad-cores, but it means the motherboard designs were ready to go well in advance of chip availability. So it is off to the races.
Now we will enter the benchmark propaganda wars. Intel fan boys will claim that Barcelona sucks. AMD fan boys will say it is way superior. Both will show benchmarks to prove their point. How can that be? Well, there are two big issues (and a swarm of small ones) with benchmarks. One is optimization, the other is specialization, in this case floating point versus integer. For people who actually buy servers, who actually want the best bang for the buck, who are not locked into Intel, they are going to need to run tests on both platforms to see what works.
There is agreement that AMD has really good floating point capabilities. So that means scientific applications are going to lean to AMD. But there is a claim from the Intel camp that servers mostly just serve up data; Intel's floating point capacity will do just fine. Ten years ago I would have agreed with that, but things have changed. Visual is in. Visual requires floating point. Fewer and fewer servers are being devoted to just plain accounting or data serving.
To me the new AMD architecture looks superior for a couple of reasons, but I know that superior looking architecture does not always translate to real performance. First, the AMD memory controller is still on the server chip. Intel likes to run benchmarks that go to memory infrequently enough that its off-chip memory controllers don't appear to be a bottleneck (this is not new to Barcelona, but should become more of an issue with four cores needing to be fed memory). AMD's design will be a huge advantage in high end servers with as many as 8 chips, meaning 32 cores.
While both Intel and AMD have introduced technology to make virtualization easier, and both have some merit, I suspect AMD's architecture will work better in datacenters. If you are running a bunch of virtual machines on a multiprocessor, multicore server you also want to have multiple network connections (typically 10 Gigabit Ethernet connections), one for each virtual server. AMD's new design scales out nicely; Intel's current design, the Xeon 7300, does not.
Again, I have not personally tested the new AMD or latest Intel machines. I am analyzing what specialists are publishing.
I would say that AMD investors should take heart; Barcelona looks good. It will look even better as AMD ramps up processing speed (the first out the gate quad-cores have slower clock cycles than most of us expected). However, as long as Intel is willing to undercut AMD on pricing, you have to consider AMD a long-term investment, and a risky one at that. I own the stock; I want to see what its worth when AMD market share hits the 51% tipping point. That may never come; at best it is years away.
See also my AMD page
First, as far as I know, all AMD executives and employees are alive and well, so the boys at Intel have been too busy trying to catch up with AMD advanced technology to watch the Sopranos. Their unethical business methods will doubtless be considered by Intel investors to be mere sharp business practices. Essentially what Intel is accused of by Japan, Europe, and Korea is limiting AMD to very small markets by illegally discouraging dual sourcing of processor chips. Intel says it never did this, and if it did it stopped doing it. And my understanding is that nothing Intel did, would, in itself, be illegal. You can price your products however you want. It is the context that matters: pricing schemes can become illegal when they are designed to create a monopoly. Intel's main defense is look, we lost market share lately, we can't be a monopoly. But they lost market share after two changes: AMD introduced 64 bit x86 processors when Intel tried to force its clients to switch to Itanium processors in order to get 64 bit, and Intel was informed by regulatory agencies that it was being investigated.
In 2006 Intel was on the ropes and responded by taking advantage of its capital position. It started a pricing war that benefited computer makers (Dell, HP, etc.) and consumers but that drove AMD to the wall. In the later half of 2006 Intel released a new processor design that showed some improvement on older designs. This happened while AMD was trying to absorb its acquisition of ATI, which simply put it in position to get its ass kicked by NVidia and Intel at the same time.
Today AMD's stock price is below its 2002 level, even though it is a much larger company now. 2007 revenues look to be roughly double those in 2002. Earnings are bad, in fact negative, because of the pricing war with Intel and the cost of the ATI acquisition.
But that is the past; the future depends on industry adoption of Barcelona technology, particularly the quad core Opteron processor for servers. Unlike when Opteron was introduced (no major players joined in the introduction), IBM, Dell, and HP all are ready with quad-core Opteron servers. These processor chips can also be plugged into AMD-based servers that have been selling in 2007 because they are pin-compatible with the dual-core Opterons. I doubt many companies will be pulling out dual-cores to put in quad-cores, but it means the motherboard designs were ready to go well in advance of chip availability. So it is off to the races.
Now we will enter the benchmark propaganda wars. Intel fan boys will claim that Barcelona sucks. AMD fan boys will say it is way superior. Both will show benchmarks to prove their point. How can that be? Well, there are two big issues (and a swarm of small ones) with benchmarks. One is optimization, the other is specialization, in this case floating point versus integer. For people who actually buy servers, who actually want the best bang for the buck, who are not locked into Intel, they are going to need to run tests on both platforms to see what works.
There is agreement that AMD has really good floating point capabilities. So that means scientific applications are going to lean to AMD. But there is a claim from the Intel camp that servers mostly just serve up data; Intel's floating point capacity will do just fine. Ten years ago I would have agreed with that, but things have changed. Visual is in. Visual requires floating point. Fewer and fewer servers are being devoted to just plain accounting or data serving.
To me the new AMD architecture looks superior for a couple of reasons, but I know that superior looking architecture does not always translate to real performance. First, the AMD memory controller is still on the server chip. Intel likes to run benchmarks that go to memory infrequently enough that its off-chip memory controllers don't appear to be a bottleneck (this is not new to Barcelona, but should become more of an issue with four cores needing to be fed memory). AMD's design will be a huge advantage in high end servers with as many as 8 chips, meaning 32 cores.
While both Intel and AMD have introduced technology to make virtualization easier, and both have some merit, I suspect AMD's architecture will work better in datacenters. If you are running a bunch of virtual machines on a multiprocessor, multicore server you also want to have multiple network connections (typically 10 Gigabit Ethernet connections), one for each virtual server. AMD's new design scales out nicely; Intel's current design, the Xeon 7300, does not.
Again, I have not personally tested the new AMD or latest Intel machines. I am analyzing what specialists are publishing.
I would say that AMD investors should take heart; Barcelona looks good. It will look even better as AMD ramps up processing speed (the first out the gate quad-cores have slower clock cycles than most of us expected). However, as long as Intel is willing to undercut AMD on pricing, you have to consider AMD a long-term investment, and a risky one at that. I own the stock; I want to see what its worth when AMD market share hits the 51% tipping point. That may never come; at best it is years away.
See also my AMD page
Wednesday, January 24, 2007
AMD, Intel and Sun Microsystems
Yesterday I listened to three analyst conferences, and you can read my summaries of them if you like: Advanced Micro Devices (AMD), Yahoo (YHOO), and Sun Microsystems (SUNW). I currently own stock in AMD; once I lost some money holding Sun waiting for a turnaround back in 2003.
Often you learn about general trends in an industry from listening to management trying to explain their results at an analyst conference. For instance, a number of semiconductor chip makers had slow third and fourth quarters of 2006. Several claimed that end-user demand was fine, but that manufacturers who incorporate their chips into products like cell phones had tightened up on inventories. Thus slower sales. So everyone is predicting growth in 2007, unless the global economy sinks. It is a reasonable story, but still might not be true, especially for an individual company.
Yesterday I learned something important about AMD's long and short term outlooks during the Sun conference. Sun has worked with AMD closely for about 3 years now, producing high-quality, relatively low cost servers based on Opteron chips. Monday Sun and Intel announced a deal: in return for also using Intel's new line of Xeon chips, Intel would allow anyone, including Sun's competitors, to license Sun's Solaris operating system, which almost every tech pundit acknowledges is the best Unix around. Solaris is way better than Red Hat Linux or Novell's Linux, so they say (I run Windows, so this is hearsay). By getting some of HP and IBM's and even Dell's customers to switch to Solaris, Sun can create an important income stream for itself (I think Solaris is now free but you have to pay for technical support).
With respect to AMD, Sun's management made it clear, saying it several times during the conference, that they expect more sales of servers with AMD Opterons in them, not less. They are adding Intel Xeon based servers which they expect to cut into sales of competitor's Xeon servers. Solaris is already available for AMD Opterons.
The timing of this move is important as well. There will be no significant shipments of the Xeon servers until the second half of 2007. By then the new generation of Quad core Opterons will be competing with quad-core Xeons. Both companies will be at 65 nm process, leveling that playing field. Xeons will still have external memory management; Opterons their famous, but improved, Hypertransport on-chip memory controller. AMD says their chips will be the clear leader in performance and performance per watt and performance per dollar. We won't know until independent testing is done, but if it is true, then AMD will continue to gobble up market share and maybe even have gross margins that pump up the stock price. But this is not a stock for short-term investors. While Intel is still stuck in short-term mode, the management at AMD thinks long term. They were not afraid to say that to analysts yesterday. Their honesty is refreshing.
Often you learn about general trends in an industry from listening to management trying to explain their results at an analyst conference. For instance, a number of semiconductor chip makers had slow third and fourth quarters of 2006. Several claimed that end-user demand was fine, but that manufacturers who incorporate their chips into products like cell phones had tightened up on inventories. Thus slower sales. So everyone is predicting growth in 2007, unless the global economy sinks. It is a reasonable story, but still might not be true, especially for an individual company.
Yesterday I learned something important about AMD's long and short term outlooks during the Sun conference. Sun has worked with AMD closely for about 3 years now, producing high-quality, relatively low cost servers based on Opteron chips. Monday Sun and Intel announced a deal: in return for also using Intel's new line of Xeon chips, Intel would allow anyone, including Sun's competitors, to license Sun's Solaris operating system, which almost every tech pundit acknowledges is the best Unix around. Solaris is way better than Red Hat Linux or Novell's Linux, so they say (I run Windows, so this is hearsay). By getting some of HP and IBM's and even Dell's customers to switch to Solaris, Sun can create an important income stream for itself (I think Solaris is now free but you have to pay for technical support).
With respect to AMD, Sun's management made it clear, saying it several times during the conference, that they expect more sales of servers with AMD Opterons in them, not less. They are adding Intel Xeon based servers which they expect to cut into sales of competitor's Xeon servers. Solaris is already available for AMD Opterons.
The timing of this move is important as well. There will be no significant shipments of the Xeon servers until the second half of 2007. By then the new generation of Quad core Opterons will be competing with quad-core Xeons. Both companies will be at 65 nm process, leveling that playing field. Xeons will still have external memory management; Opterons their famous, but improved, Hypertransport on-chip memory controller. AMD says their chips will be the clear leader in performance and performance per watt and performance per dollar. We won't know until independent testing is done, but if it is true, then AMD will continue to gobble up market share and maybe even have gross margins that pump up the stock price. But this is not a stock for short-term investors. While Intel is still stuck in short-term mode, the management at AMD thinks long term. They were not afraid to say that to analysts yesterday. Their honesty is refreshing.
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