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Suzanne Deffree

Shanghai comes into port early, but is it too late to rescue AMD?

November 13, 2008

AMD’s Shanghai is here, and it’s early. But the release today left me wondering, once again, if it’s too late to save the company.

The 45-nm quad-core Opteron processor for servers has been made available today ahead of original AMD plans for early 2009 widespread availability — and ahead of Intel’s planned 45-nm Nehalem server chips expected early next year. This affords AMD a rare opportunity to defy Intel’s often repeated "we only have to beat ourselves" to market marketing line and perhaps claim a larger share of OEM business. Indeed, Dell, IBM, HP, and Sun all came out today in support of Shanghai.

Will Shanghai steal the market? Doubtful. Many believe Intel’s technology will be far better, even if it comes later. (See "Intel vs AMD: The final chapter entry?") However, Shanghai’s early availability helps keeps AMD in the game, if only for now. Shanghai follows on AMD’s Barcelona botch, which the company’s top brass apologized profusely for at its December 2007 analyst day. You’ll recall that AMD released the 65-nm Opteron with much fanfare in September 2007, touting it as superior to Intel’s quad-core (even though Intel had already released its quad-core). But a bug derailed AMD’s plans and Barcelona didn’t become available until April 2008, putting AMD in very hot water.

Still burned, the episode left many industry watchers wondering if and how AMD could recover. Today at its 2008 analyst day, AMD faces a very different market. Loss ridden, under new CEO command, and with some 2,000 less employees than it had at its Barcelona brouhaha, AMD stands before the economic crisis-exhausted and -battered financial community today in Sunnyvale and will try to explain how its struggling company will leverage Shanghai and other technologies to get its business off life support and maintain (or reclaim) its position as a viable competitor to Intel.

Attendees today will not be focused on Shanghai’s technical benefits — AMD claims the at the 75-watt, 2.3 to 2.7 GHz Shanghais deliver up to 35% more performance with up to a 35% decrease in power consumption at idle compared to Barcelona — They are suits, Wall Street watching, number guys who will want AMD to show them the money in this depressed, cost-prohibiting economy.

The financial crisis may be one of the prime reasons AMD is pitching today’s news as ideal for "IT decision-makers looking to do more with less."

According to an IDC report this week, worldwide IT spending will slow significantly in 2009 as a direct result of the global financial crisis. The forecast estimates worldwide IT spending will grow 2.6% year over year in 2009, down from IDC’s pre-crisis forecast of 5.9% growth. In the United States will be especially hard hit, with IT spending growth expected to be 0.9% in 2009, much lower than the 4.2% IDC growth forecast in August.

And Shanghai, according to AMD, has some cost savings built in. AMD says it serves 2P to 8P servers with a single architecture, while maintaining socket and thermal compatibility with the previous generation of quad-core and dual-core Opteron processors, reducing platform management complexity and costs while supposable increasing data center uptime and productivity.

AMD further reminds that its Shanghai processors fit into the existing Socket 1207 architecture and that the upcoming "Istanbul" processor, a next generation of AMD Opteron processors, will do so, as well.

Next up from AMD will be "Dragon," its 45-nm desktop Opteron that follows the “Spider” platform released in 2008. Dragon is expected in Q1. What comes after that point from AMD … well, we’ll see where they are at the end of the March quarter.

I sincerely hope that Shanghai helps AMD regain its positioning, if only because we need competition in this industry. But what are your thoughts on Shanghai? Will it keep AMD’s Opteron family in play long enough to help a company recovery? Voice your opinion below.

Posted by Suzanne Deffree on November 13, 2008 | Comments (14)

November 25, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
vinod commented:

Techinical review of SHANGHAI is damm good!!!!!!!! looking forward for issue less processor. Eagerly waiting for "Dragon". AMD please release it at the earliest.

November 25, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
KISH commented:

Appeal to all.....give preference to performance of the product not by name of the company.

November 17, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
Nathan commented:

I find it interesting that people also seem to talk about how Intel has such a better financial track record and how much AMD has struggled to get their affairs in order. Well, I would agree that there has definitely been many problems of AMD's own making, but I would also suggest a caveat into this discussion: Intel has been (and is currently being) investigated for antitrust practices against AMD. I believe NY state was the last reported incident. If this is true, then how can a smaller company compete with a larger one when they have the money to continually undermine efforts to improve their bottom line?

November 17, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
Tom W commented:

the comments posted to this blog disappoint me. This isn't economic blather. I was laid off months ago bc of the poor financial state. AMD has lost it's mojo and needs to rescure it's place as number 2 before it's technolgywill be accepted. If you can't see how economics tie into a companys worth you aren't smart enough to read EDN.

November 14, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
Tony G commented:

I also agree with most of the comments here that AMD is needed. Who wants to be monopolized by Intel as the only choice? Not me. I've always preferred AMD over Intel in terms of value for your dollar. Intel processors are overpriced and have no edge in clock speed or overall performance to justify the high cost. As a final comment, EDN should stick to covering Technology....if I want political or economic blather I can get it elsewhere.

November 14, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
Joey P commented:

whoa, commenting on your own posts now Susanne? I suspect the first comment is not from you. The only comment I agree with above is display name shenanigans''s. You geeks always forget what keeps you employed. Revenues, profits, and without that you don''t get to do technology. Grow up.

November 14, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
Scunnerous commented:

I for one will be backing and buying AMD all the way over the Intel dark-side. The people in corporations who buy this stuff need to think about where they'd be now without AMD: with a roomful of Itanium boat-anchors, probably with DRDRAM memory into the bargain. If there's one thing which Intel has had a habit of tripping over, it's its own hubris. I think I already see the early signs here: Atom & Larrabee as prime candidates, despite the loud cheers we hear here from the EDN uhh, crew. Agree with the other posters: please try to at least portray some semblance of objectivity... if you want to survive. I've about had enough of this "news" site!

November 14, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
Display Name Shenanigans? commented:

Everyone, take a deep breath. OK, now get real. Examine Intel's balance sheet and track record of profitability. Examine AMD's balance sheet and track record of losses. I can't believe there are so many people out there who can't simply see the business logic. Who's likely to survive a recession unscathed? Yes, Intel.

November 13, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
Dennis K commented:

I prefer AMD over Intel by far, Marketing does not equal performance! Please stick to product to product reviews.

November 13, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
Dr. Harold Z said: commented:

People outside of the high tech box look at Intel vs. AMD the same as Democrat vs. Republican. AMD has always been treated as the minority. Give AMD a little boost! The stockbrokers have always treated AMD with distaste and made Intel Lord of the industry. Lets see if Shanghai can make it. We need this now.

November 13, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
Frank, L commented:

Gee you'd think AMD hadn't stolen major market share from NVIDIA or released a new processor to largely positive reviews with Shanghai. Clock for clock, watt for watt, AMD is currently the leader. But you'd never have a clue reading this biased blurb.

November 13, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
ray commented:

cannot use a product that is not available , amd the relative cost is unknown

November 13, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
Tamza commented:

Largely agree with Suzanne D ... is this an Intel-sponsored hit piece on AMD. Without AMD Intel would have been free as Microsoft to keep prices high and technology behind (IBM of days gone by?). Read this along with the separate piece re: Intel's 'guidance' about next quarter's decline in revenues ...

November 13, 2008

In response to: Shanghai comes into port early, but is it too late to rescue AMD?
Suzanne Deffree commented:

Your doom and gloom article only missed one thing - a realistic, factual discussion of the merits of the new technology. Is not the magazine still EDN and not part of the blog world of the soap opera? I find it upsetting when in this day of financial crisis - as the media continually covers the headlines, that a "good: technical journal would present such a negative outlook - it is as a story of AMD failing will sell more advertising space than one about advance in technology that may just have merit - things like innovation, time to market, competition producing better products have all been replaced this negative perspective. There is a good side to that - when all of the technology companies are gone, you too and EDN will pass into history. Think about it - think about promoting rather than destroying - I don't think magazines or web site will be getting gov't bail outs!

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