Cash in Hand, AMD Targets Intel

From PC World

With Advanced Micro Devices on thin ice with severe pressure from chip rival Intel and four consecutive quarterly net losses, the cash infusion by an Abu Dhabi government investment arm could help the struggling chip maker remain competitive.

Mubadala Development Company, in Abu Dhabi, United Arab Emirates, paid US$622 million to acquire an 8.1 percent stake in AMD on Friday. Mubadala Development is owned by the Abu Dhabi government.

AMD will invest the money in a long-term strategy for research and development, products and manufacturing, said Drew Prairie, a spokesman for AMD. The money may be used toward the development of "Fusion," which will integrate a GPU (graphics processing unit) and CPU on a single die. Fusion is expected to be delivered by late 2008 or early 2009.

The deal should help AMD be competitive with Intel by providing the cash to develop new chip technologies, said Richard Doherty, research director at The Envisioneering Group. AMD needed the money to invest in fabs, research and development, and talent to develop new chip architectures, he said.

AMD is currently developing processors at 65 nanometers and losing processor market share to Intel, which this week released the power-efficient 45-nanometer Penryn chip. Intel is also investing heavily to open new fabs to manufacture 45-nm chips, so AMD needs to invest in R&D and quickly develop its future chip architectures to keep up with Intel, Doherty said.

Doug Freedman, an analyst with American Technology Research, agreed. "The 65-nm node has not been smooth sailing for the company. Investors are more focused on the 45-nm node," Freedman said.

AMD next week is expected to launch the "Spider" platform, which includes the next-generation 65-nm quad-core Phenom processor that will better support graphics cards to deliver high-quality graphics to PCs. In a financial earnings call last month, AMD said it would jump to the 45-nm chip manufacturing process by mid-2008.

"If AMD can keep its innovation gear train moving, they can give Intel a good run for its money," Doherty said. He has high hopes for AMD's ability to continue to be competitive. Demand for PCs should remain high and there will be space for all three x86 competitors -- Intel, AMD and Via -- to operate in the market, he said.

The investment also has analysts speculating that AMD could build a fab in the Middle East in the next five years, Doherty said. AMD competitor Intel has a presence in the Middle East, with a chip plant in Israel.

In addition, because Mubadala invests in education, the AMD deal could ultimately empower technology education in the Middle East, Freedman and others said.

Mubadala's investment in AMD is independent and not related to any specific initiative, said Richard Mintz, a Mubadala spokesman in Washington, D.C.

Mubadala will remain independent of AMD's operations and didn't ask for a spot on the company's board, Mintz said. Mubadala felt AMD's management team was strong and acquiring a minority stake would result in a long-term return, he said.

Mubadala, which invests in a wide variety of industries, could be looking at gaining relationships in the technology industry, Freedman said. The investment in AMD is consistent with Mubadala's strategy as a long-term investor, he said.

AMD could bite Intel with cash infusion

From www.computerworld.com

With Advanced Micro Devices on thin ice with severe pressure from chip rival Intel and four consecutive quarterly net losses, the cash infusion by an Abu Dhabi government investment arm could help the struggling chip maker remain competitive.

Mubadala Development Company, in Abu Dhabi, United Arab Emirates, paid US$622 million to acquire an 8.1 percent stake in AMD on Friday. Mubadala Development is owned by the Abu Dhabi government.

AMD will invest the money in a long-term strategy for research and development, products and manufacturing, said Drew Prairie, a spokesman for AMD. The money may be used toward the development of "Fusion," which will integrate a GPU (graphics processing unit) and CPU on a single die. Fusion is expected to be delivered by late 2008 or early 2009.

The deal should help AMD be competitive with Intel by providing the cash to develop new chip technologies, said Richard Doherty, research director at The Envisioneering Group. AMD needed the money to invest in fabs, research and development, and talent to develop new chip architectures, he said.

AMD is currently developing processors at 65 nanometers and losing processor market share to Intel, which this week released the power-efficient 45-nanometer Penryn chip. Intel is also investing heavily to open new fabs to manufacture 45-nm chips, so AMD needs to invest in R&D and quickly develop its future chip architectures to keep up with Intel, Doherty said.

Doug Freedman, an analyst with American Technology Research, agreed. "The 65-nm node has not been smooth sailing for the company. Investors are more focused on the 45-nm node," Freedman said.

AMD next week is expected to launch the "Spider" platform, which includes the next-generation 65-nm quad-core Phenom processor that will better support graphics cards to deliver high-quality graphics to PCs. In a financial earnings call last month, AMD said it would jump to the 45-nm chip manufacturing process by mid-2008.

"If AMD can keep its innovation gear train moving, they can give Intel a good run for its money," Doherty said. He has high hopes for AMD's ability to continue to be competitive. Demand for PCs should remain high and there will be space for all three x86 competitors -- Intel, AMD and Via -- to operate in the market, he said.

The investment also has analysts speculating that AMD could build a fab in the Middle East in the next five years, Doherty said. AMD competitor Intel has a presence in the Middle East, with a chip plant in Israel.

In addition, because Mubadala invests in education, the AMD deal could ultimately empower technology education in the Middle East, Freedman and others said.

Mubadala's investment in AMD is independent and not related to any specific initiative, said Richard Mintz, a Mubadala spokesman in Washington, D.C.

Mubadala will remain independent of AMD's operations and didn't ask for a spot on the company's board, Mintz said. Mubadala felt AMD's management team was strong and acquiring a minority stake would result in a long-term return, he said.

Mubadala, which invests in a wide variety of industries, could be looking at gaining relationships in the technology industry, Freedman said. The investment in AMD is consistent with Mubadala's strategy as a long-term investor, he said.

Intel Ships Power-Efficient Penryn CPUs

from the PC WORLD

HP, Lenovo and others are preparing systems with the new faster, greener chips

Intel on Sunday launched its long-awaited new line of power-efficient microprocessors, code-named Penryn, designed to deliver better graphics and application performance as well as virtualization capabilities.

Intel has teamed up with 40 original equipment manufacturers to deliver Penryn-based Xeon and Core 2 processors. Vendors including Hewlett-Packard and Lenovo have already announced business desktops with Penryn-based quad-core Xeon 5400 processors, with more server announcements scheduled to come soon. (PC World has already reviewed several new Penryn systems, including CyberPower's new gaming system, the Power Infinity Pro.)

New Process Cuts Power

The processors, manufactured using a 45-nanometer process, feature smaller transistors and cut down on electricity leaks, which makes them faster and more power efficient than earlier 65-nm processors, said Stephen Smith, director for Intel's digital enterprise group operations.

The most power-hungry Penryn-based systems will consume no more than 120 watts. Penryn-based notebooks that are due in the first quarter of 2008 will use 25 watts, Smith said. Today's 65-nm notebooks consume 35 watts of power, Smith said.

While cutting down on power usage, Penryn processors jump to higher clock rates and feature cache and design improvements that improve the processors' performance compared with earlier 65-nm processors, Smith said.

The processors deliver a 40 percent to 60 percent improvement in video and imaging performance, Smith said. New instructions on the processor speed up photo manipulation and encoding of high-definition video, Smith said.

Intel's Penryn processor for gaming systems, the 45-nm Intel Core 2 Extreme QX9650 quad-core processor, takes advantage of the instructions and includes a larger cache to deliver better graphics and video performance, Smith said.

Hardware enhancements allow virtual machines to load up to 75 percent faster, Smith said.

Corporate Change

The Penryn launch signals a new era in the way Intel manufactures chips, Smith said. The processors are the first to use high-k metal-gate transistors, which make the processors faster and less leaky compared with earlier processors that have silicon gates, Smith said. The processor is lead free, and by the second half of 2008, Intel will produce chips that are halogen free, making them more environmentally friendly, Smith said.

Intel will ship 12 new quad-core Intel Xeon 5400 server chips in November with clock speeds ranging from 2GHz to 3.20GHz, with a 12MB cache. In December, it will ship three dual-core Xeon 5200 server chips with clock speeds of up to 3.40GHz and a 6MB cache.

Intel will deliver the 45-nm Penryn processors in multiple phases, Smith said. In the first quarter of 2008, Intel will release the 45-nm Core 2 Quad processors and Core 2 Duo processors for desktops. In the same quarter, Intel will launch the Core 2 Extreme and Core 2 Duo processors for notebooks. Intel plans to release 45-nm processors for ultramobile PCs in 2008, though Smith couldn't provide an exact release date.

Penryn is a significant follow-up to the 65-nm Core 2 processor launched last year, said Dean McCarron, principal analyst at Mercury Research. A lot of business workstation users and gamers are interested in the improved media and system performance Penryn processors deliver, McCarron said.

Next: Nehalem

While the Penryn provides a small performance boost, it's not a major change in architecture, said Nathan Brookwood, an analyst at Insight 64. Rather than upgrading to Penryn systems, customers may wait for Nehalem, the next big overhaul in Intel's chip architecture that is scheduled for release in 2008, Brookwood said.

At the Intel Developer Forum in September, Intel CEO Paul Otellini demonstrated Nehalem, saying it would deliver better performance-per-watt and better system performance through its QuickPath Interconnect system architecture. Nehalem chips will also include an integrated memory controller and improved communication links between system components.

However, people who need to buy hardware now will invest in Penryn systems, Brookwood said. "It's not a massive upgrade cycle on notebooks and desktops," he said.

Pricing of the 45-nm Intel Xeon processors ranges from US$177 to $1,279 in quantities of 1,000, depending on the model, speeds, features and number ordered. The 45-nm Intel Core 2 Extreme QX9650 quad-core processor is priced at $999 in quantities of 1,000.