IBM to Expand AMD Chip Use As Intel Steps Up Counterattack

By DON CLARK
Wall Street Journal

August 1, 2006; Page B4

http://online.wsj.com/article/SB115439337708322935.html?mod=home_whats_news_us


International Business Machines Corp. is expanding its use of Advanced 
Micro Devices Inc. chips, a boon to AMD as rival Intel Corp. steps up a 
counterattack.

IBM was the first big maker of server systems to adopt AMD's Opteron 
microprocessor, introduced in April 2003. The computer maker initially 
focused only on high-performance applications, while competitors such as 
Hewlett-Packard Co. and Sun Microsystems Inc. pushed Opteron more widely.

At an event in New York today, however, IBM is announcing five new servers 
for mainstream business applications that will use a new version of the 
Opteron expected in several weeks. The announcement follows Dell Inc.'s 
decision in May to adopt Opteron for high-end systems.

IBM, Dell and H-P say they also plan to use a new Intel chip -- code-named 
Woodcrest -- that increases the performance of the Intel Xeon line that is 
most widely used in low-end servers. But some computer users continue to 
demand Opteron.

"Clearly there are customers that have asked us for this processor 
capability, and we listened to the marketplace," said Susan Whitney, 
general manager of IBM's System X product line.

AMD's stock has fallen lately, reflecting fierce price competition between 
the chip makers and fears that Intel will slow AMD's advance. But Mercury 
Research, a market watcher, reported yesterday that AMD chips accounted for 
25.9% of world-wide second-quarter unit shipments of servers based on the 
standard x86 design, compared with 22.1% in the first quarter.

To court customers in the financial community, IBM already sells an 
Opteron-based blade server, Ms. Whitney said. Blades are computing modules 
arranged vertically to save space compared with horizontally configured 
servers.

The new Opteron-based machines include two blade servers, which can be 
upgraded from two chips to four by plugging in a companion module alongside 
an existing blade, Ms. Whitney said. Systems using the new Opteron chip, 
which offer the equivalent of two electronic brains, also may be upgraded 
in the future by plugging in new four-processor chips that AMD is 
developing, she said.

Other features include a technology that accelerates the speed at which its 
new machines can tap large pools of memory, and software that lets 
customers monitor and manage the amount of electrical power the computers 
use, Ms. Whitney said.

An AMD spokesman declined to comment.

An Intel spokesman noted IBM's commitment to Intel's new Xeon chips. "We 
just need to double down on our broad efforts to expand our work with IBM," 
he said.


================================
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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