September 7th, 2007
Will AMD Barcelona kill off high-margin AMD CPUs?
AMD was riding high a year ago dominating sales in the dual-processor Server market and virtually owned the multi-processor (4+) Server market. Then Intel launched the Core Micro-architecture on the desktop and dual-processor Server market and momentum swung from AMD to Intel overnight in both of those markets. The one exception was the multi-processor Server market where AMD continued to reign virtually unchallenged. That all changed this week when Intel launched the 7300 series “Caneland” platform with the “Tigerton” 7300 series CPU.
Intel flips fortunes on multi-processor servers
Intel went from being a virtual non-player in the multi-processor Server market to a dominator overnight on everything except for the niche HPC (High Performance Computing) market. AMD quickly responded by saying that Intel’s Tigerton CPU “falls short”. But how much more of a beating does AMD want if a 91% increase over AMD’s 8222 3.0 GHz 4-processor server on SPECint_rate_base2006 isn’t enough? While SPECint_rate2006 already represents a lot of mainstream workloads, Intel also broke 4-processor x86/x64 records for SPECjbb2005, SPECweb2005, and TPC-C by large margins.
Next week’s “secret” Barcelona launch
One of the worst kept secrets is next week’s imminent launch of AMD’s new Barcelona quad-core CPU. Even AMD admitted in their response to Intel’s 7300 platform that Barcelona will be a few days away. Even the leaked prices have been widely distributed and AMD fans are cheering at the arrival of sub-$300 Barcelona quad-core DP (Dual Processor) CPUs and the $1004 (at quantity 1000) top bin Barcelona 2.0 quad-core MP (Multi Processor) CPU.
Note: AMD declined to comment on these prices saying that they won’t comment on “speculation”. But being this close to the launch date, it’s very unlikely the leaked prices are wrong.
Barcelona: The Opteron dual-core killer
If we stop to think about the ramifications of cheap low-frequency Barcelona processors, AMD could be facing a real pricing dilemma. Barcelona at 2 GHz will only threaten high-margin AMD CPUs but it will not threaten high-margin Intel CPUs because the clock speed isn’t high enough yet. When a $250 Barcelona DP quad-core kills a $750 Opteron DP dual-core processor on performance, who will buy that $750 part? When a $700 Barcelona MP quad-core kills a $1600 Opteron MP dual-core processor, who will buy the $1600 part? Barcelona will effectively erase all of the high-margin CPUs in their line-up next week when it launches.
AMD has priced the Barcelona processor for volume which is critical to keeping those Fabs busy and critical in maintaining market share. This is pretty much what Intel has been forcing AMD to do for the last year in the desktop market and AMD had to choose between losing margins and losing market share. Three quarters of back-to-back ~$600M losses makes it clear which choice AMD made.
What makes a quad-core a quad-core?
Of course this wasn’t what AMD intended because they had planned on launching Barcelona in the mid 2 GHz range but things fell through. AMD likes to boast about their “native quad-core” technology where they build a quad-core processor out of a single huge 283mm squared die, but the brutal challenges of manufacturing this ambitious chip has meant that AMD has had to ship Barcelona 6 months late and 600 MHz lower than originally planned. If underperformance and delays is what “native quad-core” buys you, Intel’s strategic decision to hold off on native quad-cores until late 2008 seems to be the right choice.
It’s no wonder AMD’s executive VP Mario Rivas admitted back in March that he wished AMD had “immediately done a MCM - two dual cores and call it a quad-core” if he could do it all over again. Intel’s executives have stated that single-die processors are nice in concept but even Intel with its manufacturing expertise would not attempt it in 2007. Those two dual-core dies on a single Intel Tigerton processor seem to be smashing plenty of performance records just fine so it appears to be a wise decision. Note that it isn’t just a trivial matter of “gluing” the dual-core chips together to make a quad-core processor; it takes some serious packaging skills to pull it off correctly.
Predictions on Barcelona performance
Barcelona will launch at 2 GHz which is a full 600 MHz lower than originally thought. At 2 GHz, there is simply no way it will come close to reclaiming the performance crown for AMD for the majority of the market. AMD proudly displayed their SPEC CPU 2006 floating point performance numbers and they will reign supreme in the niche High Performance Computing market. AMD has refused to comment on SPEC CPU 2006 integer performance which represents the workloads that the majority of the market demands.
To get an ideal of how AMD’s Barcelona 2.0 GHz product will perform on SPECint_rate2006, I ran some calculations and I’ve compared my numbers with other reputable sources and their calculations are in line with mine. I estimate that a Barcelona model 8350 2.0 GHz 4-socket will probably have a peak SPECint_rate2006 score in the mid 150s plus or minus 5% which surprisingly positions it slower than Intel’s low-voltage Tigerton L7345 4-socket 1.86 GHz processor which scored 166. [Update 9/8/2007 - Leaked - AMD Barcelona versus Intel Clovertown and Tigerton]
However, the Barcelona 8350 will most likely perform better than Intel’s low-end E7320 2.13 GHz processor which has half its cache crippled. Because the Barcelona 8350 is priced below the Intel E7320, AMD will be very competitive on the low-end of the market but its high-margin parts will be virtually non-existent until AMD can crank up the clock speeds on Barcelona. This is the same margins for market share game AMD has played in the last year. If AMD can deliver on 2.3 GHz Barcelona parts by the end of the year, then they will be in a much healthier position but they won’t be able to regain the performance crown until they can hit the high 2s. But by the time AMD ramps closer to 3 GHz, we’re looking at Intel Tigerton’s 45nm successor called Dunnington so the pressure from Intel is unrelenting.
George Ou is Technical Director of ZDNet. See his full profile and disclosure of his industry affiliations.
