Intel will face its strongest challenge in more than a decade when its archrival, Advanced Micro Devices, formally unveils the Opteron 64b microprocessor next week.
Opteron represents a determined attempt by Advanced Micro to undermine Intel's blueprint for dividing the computing universe into two separate worlds: one represented by its desktop 32b Pentium processors; the other by its pricier, corporation-oriented Itanium 64b chips. In doing so, Advanced Micro is attempting to blur the line between the two computing categories, positioning its new processor as a simpler transition for software designers and computer users from the now-standard 32b chip architecture to 64b, which shatters the limit on computing memory from 4 billion bytes to what, for all practical purposes, is an unlimited ceiling.
But Advanced Micro, which competes directly against Intel in both microprocessors and in the market for flash memory chips, which are widely used in consumer products like cellphones, faces a big challenge in its attempt to chip away at Intel's powerful status in the industry. Indeed, many industry executives see the Opteron processor and the Athlon 64 -- its companion desktop version to be released this fall -- as a make-or-break test for AMD as it tries to carve out a secure, profitable position within Intel's shadow.
Last week, AMD, while surpassing Wall Street expectations and claiming to have gained market share against Intel, reported a US$146 million loss for the quarter on revenue of US$715 million. AMD, based in Sunnyvale, California, has reported losses in four of the past five years and badly needs for Opteron to be a hit product.
The company is hoping that it can take advantage of the industry transition from 32b to 64b computing, which will initially be driven by the need for corporations to handle vast databases. But looking forward several years, an even bigger market beckons as desktop computers are expected to support far more powerful graphical applications.
During the past three decades Silicon Valley has gone from what now seem like simple 4b designs to the ability to turn out incredibly complex 64b processors. Each generation of chips has permitted computers to make use of larger blocks of data while also allowing them to double the amount of information that can be handled with each super-fast tick of the computer clock.
Until now Intel has thoroughly dominated the desktop computing world, while companies like IBM, Sun Microsystems and Hewlett Packard have sold more powerful and more expensive 64b computing systems to corporate computer users. Almost a decade ago Intel and Hewlett-Packard joined forces to design the 64b Itanium in an effort to blend the increasing computing potential of the more powerful processor with Intel's sophisticated manufacturing capabilities. Their first product was commercially introduced in 2001; it is now in its second generation.
Slow to convert
Itanium, however, has been slow to catch on, in part because the chip's performance has been disappointing and in part because software designers and corporate customers have been slow to convert software from other hardware platforms. Moreover, the computer cognoscenti have generally been more enthusiastic about the AMD chip design, which is expected to offer roughly equal performance at a lower price.
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