Studio Chooses Intel for Chip Pact
In a Blow to AMD, DreamWorks Animation Shifts in Move to 3-D

By DON CLARK
Wall Street Journal

July 8, 2008

http://online.wsj.com/article/SB121548418107834867.html?mod=hps_us_whats_news


DreamWorks Animation SKG Inc. has chosen Intel Corp. to supply chips and 
other technology for its big computer-animation operations, a shift that 
will cost Advanced Micro Devices Inc. one of its most prestigious customers.

The pact is expected to replace the studio's computing hardware -- which 
now includes 1,500 Hewlett-Packard Co. server systems and 1,000 
workstations that use AMD microprocessors -- with new H-P systems that use 
Intel chips. DreamWorks Animation said the resulting increase in computing 
power would substantially shorten the time needed for many computing chores 
and aid the studio's planned shift next year to 3-D animation. "For our 
artists, the impact is going to be really nothing less than monumental," 
said Jeffrey Katzenberg, DreamWorks Animation's chief executive.

Financial terms aren't being disclosed. Mr. Katzenberg stressed that the 
move was based on capabilities of two forthcoming generations of Intel 
chips. "They are radical game-changers for the entire field of computing," 
he said.

Intel's next major chip family, code-named Nehalem, is expected to offer as 
many as eight processors and hit the market in the second half of 2008. 
Intel about a year later is expected to deliver a chip dubbed Larrabee that 
can be used to manage graphics in computers and other chores that could 
help customers such as the animation studio.

Besides helping speed up the studio's hardware, Intel will send a team of 
programmers to help DreamWorks Animation adapt its software to exploit 
Intel's new chips and aid in the shift to creating 3-D effects, said Paul 
Otellini, Intel's CEO. DreamWorks, in turn, will help Intel develop 
technologies that could find their way into chips used in personal 
computers and portable devices.

DreamWorks Animation's decision to use Intel-powered systems is a blow to 
AMD, which has heavily courted tech-savvy animation houses as customers. 
AMD announced a three-year pact with the studio in April 2005, and Mr. 
Katzenberg has spoken at major AMD events.

At an event in May 2007 at the DreamWorks Animation headquarters in 
Glendale, Calif., the studio's executives extolled how important AMD 
Opteron chips with dual processors were in creating "Shrek the Third." They 
also said the company would likely upgrade its servers to use a 
four-processor version of Opteron, code-named Barcelona, that was announced 
in September 2007. But the initial version of that chip had technical flaws 
that caused delays in increasing production of the product. The issues 
contributed to financial problems at AMD, including a $358 million loss in 
the first quarter.

John Taylor, an AMD spokesman, noted that the company still counts major 
studios as customers, including Walt Disney Co.'s Pixar unit, and is 
persuading some to exploit both its graphics chips and its microprocessors. 
He added that technology commitments from companies such as DreamWorks 
Animation tend to be cyclical. "We would very much hope to be working with 
them in the future," he said.

The animation company, which was spun off from live-action studio 
DreamWorks SKG in 2004, is expected to make its shift to a new generation 
of 3-D images with "Monsters vs. Aliens," a film scheduled for release in 
March 2009. Mr. Katzenberg says the new format, which requires users to 
wear a new style of glasses, will have a marked effect on the visual 
appearance of animated movies.


================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923  Fax: 713-743-3927
antunes at uh dot edu

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