Fast Chips Slow Server Sales
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New virtualization technique may mean fewer physical servers are needed, study says.
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New products include slightly faster mainstream models and new lower-power server chips.
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(InfoWorld) - AMD will delay its launch of the Barcelona quad-core Opteron server chip from its expected date in July until October, setting the company back in its effort to compete with new processors from Intel, according to analyst reports. Processor companies make more money selling server chips than desktop or laptop chips, so the move will hit AMD's 2007 earnings hard, pushing the company to lose $2.59 per share instead of only $2.48 per share, according to a report released Tuesday by Citigroup analyst Glen Yeung. "Barcelona is generally viewed to beÂ AMD's best opportunity to stem server share loss to Intel. While AMD's recent notebook win at Toshiba may balance any negative revenue implications to our current model, Barcelona's delay has negative implications for AMD's gross margin," Yeung wrote. His estimate is a larger loss than the consensus Thomson Financial forecast that AMD will lose $2.47 per share for 2007. The news comes at a bad time for AMD, which has promised for months that it would launch the chip in the second half of 2007,Â helping the company to rebound from the effects of a price war with Intel. AMD is already hurting,Â posting a $611 million first-quarter lossÂ in April, following on the heels of theÂ $574 million loss reported in JanuaryÂ for fourth quarter earnings last year. Barcelona is the key to taking that fiscal burden off AMD's shoulders,Â AMD CEO Hector Ruiz said on May 3 at the company's annual shareholder meeting. Although Intel is several quarters ahead in improving its chip manufacturing capabilities, AMD stays competitive by creating more innovative designs, he said. AMD claims Barcelona will deliver better performance on memory-intensive applications than Intel's Clovertown quad-core Xeon server chips that have been on the market since November. AMD stuck to its guns on Wednesday, insisting that it is still on schedule, and pointing as evidence to itsÂ demonstration on Tuesday of prototype Barcelona chips in serversÂ from infrastructure partners Supermicro Computer, Tyan Computer, and Uniwide Technologies at theÂ Computex trade show in Taipei. "We remain on track for a summer 2007 launch with partners shipping platforms in the third quarter," said AMD spokeswoman Marian Kelley. She blamed the delay rumors on Cray's announcement Monday that it expects revenue to drop because of a delay in shipping its quad-core Cray XT4 systems. In fact, Cray was referring to AMD's midrange Budapest processor, not Barcelona, she said. "The guidance that we've been giving and that we're sticking to is that Budapest will follow Barcelona in the second half of 2007," Kelley said. Despite AMD's assurances, other analysts echoed the Citigroup report, saying they have heard similar news from server vendors, distributors and board makers. On May 30, another report called AMD's promise to launch Barcelona in mid-2007 "a head fake" since the chip will not be available at full volume until August at the earliest, according to a note from analyst Patrick Wang at Thomas Weisel Partners. In contrast, Intel is expected to succeed in shipping its Penryn processors in the late third quarter or early fourth quarter. That timing will allow Intel to essentially catch up to AMD and soften the blow of losing sales to customers who see a performance advantage in Barcelona, Wang said.
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In recent months, Intel delayed several chips and recalled other, defective ones. It overestimated demand, thereby causing an inventory glut.
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(InfoWorld) - The global chip market is suffering from falling prices in microprocessors and memory chips, bad news for companies but great for users. Steep declines in DRAM (dynamic RAM) for PCs and NAND flash memory, used in a variety of gadgets including digital cameras and iPods, as well as microprocessors prompted the Semiconductor Industry Association (SIA) to slash its global sales forecast for this year to US$252 billion, just 1.8 percent growth compared to last year. The previous estimate called for sales growth of 10 percent this year. Sales of gadgets themselves are on track to meet forecasts, however, SIA said. Chip shipments overall remain healthy, as does end-user demand. But prices continue to fall for a variety of reasons, including a glut in the memory market and a price war between Intel Corp. and Advanced Micro Devices Inc. in microprocessors. "End markets continue to be strong, with consumers realizing major benefits from lower chip prices coupled with ever-increasing performance and functionality from advances in chip technology. Despite a forecast of slower growth, we expect that global sales of microchips will surpass last yearâs record level," the SIA said in a statement on Wednesday. Intel and AMD have been battling each other through price reductions for over a year now, and reports indicate that Intel will cut prices on some microprocessors again in late July. The price war has been good to consumers, delivering more technically advanced microprocessors at a lower cost. Microprocessors are generally the most expensive chip inside a PC. The DRAM market has been hit the worst. The price of mainstream 512M-bit second-generation double data rate (DDR2) DRAM that runs at 667MHz has plunged 72 percent so far this year to US$1.79 per chip, according to DRAMeXchange Technology Inc., a Taiwanese clearinghouse for the chips. The market research division of the company has noted that the chips appear to be bottoming out, and that prices could tick up a bit later this month. DRAM price reductions for users normally come a few weeks or a month after the spot DRAM market falls. NAND Flash memory has suffered a similar fate as DRAM, but not quite as steep a decline. A glut of the chips early in the year has been wiped out by memory makers, which tweaked production lines to make more DRAM instead of NAND flash. Prices of 8G byte NAND has fallen 18 percent his year to US$9.26, according to DRAMeXchange, while the 4G byte capacity has dropped nearly 15 percent to US$5.69. The SIA expects PC and mobile phone sales to rise 10 percent each this year. Mobile phone sales may give chips a bigger boost, however, because users are buying more 3G (third generation communications) handsets, which contain more chips than older phones. Sales of personal media players and digital music players are expected to grow by more than 20 percent this year, SIA said, but noted that price competition in the market will likely keep NAND flash chip prices tame. The SIA report followsÂ a similar estimation of the global chip industry by Gartner. A few weeks ago, the market researcher lowered its forecast to just 2.5 percent growth to US$269.2 billion this year, down from an earlier estimate of 6.4 percent. Â ADVERTISEMENTIBM Information On Demand 2006Industrial Industry Leaders, please join us at IBM's premier information management global event, IBM Information On Demand 2006, October 15-20, Anaheim, CA. More IBM business and technical solutions content in one place than ever before! Select from  over 800 sessions. Register today!
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Linux's server growth is slowing vis-a-vis Windows server growth.  The reasons are several.  The answer is clear: take on Microsoft directly.
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Montalvo Systems has a multi-core chip, but not all of the cores are the same. That in part explains why investors have put money into it.
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Paperwork delays slow AMD Intel and AMD have embraced a divide and propaganda approach to tout their upcoming server chips.â¦
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Advanced Micro Devices Inc. on Thursday reported lower revenues than in the previous quarter, although profits climbed on increased 64-bit sales into the server market.
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Advanced Micro Devices Inc. confirmed Thursday it will delay the widespread launch of its new "quad-core" server chip until the first quarter of next year, but the world's No. 2 microprocessor maker also promised investors it will return to profitability in 2008.
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TechWeb - The processor&#39;s sweet spot will be in four-way servers, and midrange two-way servers, but AMD will need to show increased performance for the price if it wants to add customers, analysts suggest.
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Upcomimg C7 chips will run at higher speeds, but consumer less power.
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(InfoWorld) - Anyone looking to add a bit more memory to their computers won a gift from the DRAM (dynamic RAM) industry. Heavy competition has caused prices to tumble and industry analysts predict further price declines. The contract price of the most widely used DRAM chips, 512Mb, DDR2 (double data rate, second generation) chips that run at 667MHz dropped 12.5 percent from two weeks ago to $1.75 each as of Thursday, a new low for this year according to DRAMeXchange Technology, which runs an online trading site for the chips. That's great news for users for three reasons. DRAM price declines increase the likelihood that PC vendors such as Hewlett-Packard and Dell will add more DRAM to the computers they sell, or offer extra DRAM as an incentive; it give users a chance to buy more DRAM on the cheap; and it generallyÂ spurs memory chip makers to move forward on new technologyÂ that will ultimately increase computing performance. Contract DRAM prices for DDR2-667 chips have plunged 70.5 percent so far this year to the Thursday low. The main reason is because memory chip makers built too many new production lines in anticipationÂ of strong demand for Microsoft's Windows Vista, which requires more DRAM per PC, as well as because stronger DRAM prices in general for the past few years was a sign to some that the market had stabilized, analysts say. DRAM prices may continue to decline a bit further, but downside appears limited, according to Gartner. Today's pricing is at a similar level to the lows reached in May of this year, when DRAM makers refused to sell because the price had hit their cash cost. "However, we may see some activity below this level, because some brokers and distributors who are holding inventory may be prepared to sell at a lower price to clear stock," the market researcher said. Over the years, DRAM makers have tended to place more emphasis on winning market share than on profits, and the current DRAM price declines are symptomatic of their battles. Companies have invested so much money in new factories that the increased output has caused a glut, leading to price declines. Prices for DRAM chips fellÂ almost 40 percent in the first half of this year, compared to the first half of 2006, offsetting a 66 percent increase in unit shipments, according to the Semiconductor Industry Association. Contract prices are typically renegotiated between DRAM makers and PC vendors every two weeks. Around four fifths of all DRAM is sold by contract, while the rest is sold on the spot market, just like commodities such as oil and gold. Â
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'Shorty' kicks blades out of the data center and onto the floor The mid-market push has definitely been heating up for tech vendors in recent weeks. We've already seen Dell, IBM and Hitachi touting their simplified server and storage lines with SMB-aimed gear, and frankly, we're starting to recite the hard sell for companies with limited budgets and expertise in our sleep.â¦
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InfoWorld - Newly released processors from Advanced Micro Devices and Intel will reinvigorate the market for high-end servers, according to one server analyst.
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In an effort to help enterprise users get a handle on power and heat issues associated with new server designs that pack more processing punch in smaller spaces, Advanced Micro Devices on Monday announced that systems built with its 32/64-bit Opteron
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We're sure. Kinda Not satisfied with flexing its machismo through the zippy 4.0+GHz Power6 chip, IBM appears to have a couple rather radical notions in mind to improve its Unix server performance over the next couple of years.â¦