September 25, 2003

AMD betting big pile of chips on new 64-bit processors

- by Chris Preimesberger -
SAN FRANCISCO -- Every time Advanced Micro Devices of Sunnyvale, Calif. comes out with a newer, faster processor, some analyst or headline writer claims it will make or break the company. Well, although AMD has been posting losses for two years, the company has long since "made it," so that part isn't relevant. It has taken many broadsides from Intel, Applied Materials, and other chipster foes over the years and lived to tell about it, so it won't break anytime soon. Nonetheless, the three 64-bit Athlon processors it introduced this week may turn out to be a significant plot point in the continuing saga of the IT hardware industry.

Years of R&D involved in new offerings

AMD is betting heavily that the idea of grid computing (slower, cheaper computers, but more of them) won't trickle down into the consumer sector anytime soon. In other words, it believes that customers are going to continue their conventional path: to pay for larger (literally, 193 sq. mm in size) and much faster single processors to enable something the company is calling "cinematic computing" on a wide-scale basis.

I caught a firsthand glimpse of this so-called "cinematic" power at the AMD product launch Tuesday at the Yerba Buena Center, which featured a curious on-stage combination of AMD executives and musicians Dweezil Zappa (yep, that Dweezil Zappa) and Ray Benson, leader of the Texas-based swing/boogie band, Asleep at the Wheel. Zappa and Benson played a few licks and explained that they, as modern recording-industry artists who use their own workstations, appreciate the work the good people at AMD do for enabling them to make better quality recordings with such fast new processors.

All AMD showed at the demo stations were animated videos and videogames, but I have to say the demos appeared about as close to professional-quality videotape as any computer-generated digital image I've ever seen. Crisp resolution/color and whipped-cream-smooth movement illustrated the point, although I didn't spend a lot of time gawking. Outside the W Hotel, across Third Street from the Yerba Buena complex, AMD had equipped a sparkling new Cadillac Escalade with a poundingly loud quadraphonic stereo using an Athlon 64-powered amplifier. That a passerby could not ignore; the doors were wide open and, unless you were hearing impaired, it practically blew you back -- like in those Maxell ads.

'Hungry for innovation'

"The world is hungry for another round of innovation," AMD president/CEO Dr. Hector Ruiz told a packed auditorium. "Users are always looking for the latest mind-blowing experience ââ¬Â¦ our new platforms are designed for the needs of customers of both today and tomorrow."

If faster, sharper, and louder represents another round of digital innovation, then AMD is on the right track. And they're the first to the big market; market leader Intel isn't ready yet. If 64-bit processing simply means overkill, as some industry people on the desktop and server sides are saying, then there are some serious questions to be asked. I asked Ruiz and his lieutenants one of them at the press conference:

"If I'm a businessman who's just sunk serious money into 32-bit processors during the last two or three years, why shouldn't I just keeping clustering them instead of investing many more new dollars into those with 64 bits?"

Answered Rich Heye, AMD's VP of the Microprocessor Business Unit: "Well, it depends on what you want to do, of course. If you're running 32-bit apps, then I agree that it makes sense to cluster the hell out them for as long as you can. But who wouldn't want the extra power for the future?"

Fair question. But doesn't there come a point when enough becomes the operative word? Not everybody wants or needs professional quality video or audio capability; a broad segment of the computing audience has already invested its money and is quite content, thank you, with what was available yesterday and with what's out there right now. As long as it works.

"In fact, a larger number of people and businesses than you might think are still doing work daily using such ancient things as Intel 386/486, and old Macs," said Java developer Matt Jacobsen of Aircraft Technical Publishers in Brisbane, Calif. "I've seen them in use in several companies.

"In general, though, as history has shown, hardware is always ahead of software. And every new breakthrough will have people saying, 'But we could never use that much power.' Then in one to two years, the software catches up and needs that much power. This is largely due to Microsoft's operating systems getting bigger and more bloated," Jacobsen said.

For sure, that small market segment hooked on speed, always looking for the edge -- hard-core gamers, professional filmmakers and animators, and other high-performance-seeking folks -- will no doubt junk their old stuff and pull out credit cards for hardware featuring this new generation of chips. And when the 128-bit chips come out in five years, they'll go for those, too.

Current platforms 'not powerful enough'

"Today's technology is not powerful enough to run the next wave of applications," Ruiz said. "IT drives the digital media revolution, and the needs are going to be substantially greater in the future than they are now. We need to give creative people more options, so they can do what they do best," he said. "We're far beyond simple information processing."

AMD's strategy is that it will try to woo the consumer market first, and then scale its way up into the enterprise.

"Users are the ones who will drive the demand for these new super-processors," Heye said, adding that several companies in Taiwan are building the 64-bit motherboards today. "This chip is gonna change the world. It's ready to go because the ecosystem is ready for it."

AMD's gamble hinges upon how many mainstream consumers it can convince to go for the continued upward spiral of power in their computer boxes. If they can make, say 5 percent of the market open their checkbooks, then they will have succeeded in a big way. The next two to three years will indeed be crucial for the company, which owns about 16 percent of the overall chip market.

Specs: The chips are the AMD 64 Processor for desktops and notebooks (integrated 64-bit, PC3200 DDR memory interface and Hyper Transport -- technology capable of transmitting and receiving up to 6.4 GB of I/O data traffic); the AMD 64 FX Processor for desktops (128-bit, PC 3200 DDR memory interface, 6.4 GB of I/O traffic); and the AMD Opteron Processor for servers and workstations (up to 19.2 GB of I/O bandwidth). Each processor houses approximately 105 million transistors.

Pricing: AMD 64 Processor Model 3200 for Desktops: $417 in 1,000-unit quantities; AMD 64 Processor Model 3200 for notebooks, $417 in 1,000-unit quantities (Model 3000 for notebooks, $278 per 1,000-unit quantity; AMD Athlon 64 FX-51 Series: $733 in 1,000-unit quantities.

All three of the processors are available now through AMD sales channels and its Web site.

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