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Updated throughout at 10:30am PT after speaking with AMD.

AMD's chief technology officer, Phil Hester, has resigned his post atop the company's engineering efforts.

Former AMD CTO Phil Hester

(Credit: AMD)

According to a flash report from The Wall Street Journal, Hester will not be replaced. An AMD spokesman confirmed that Friday is Hester's last day with the company, and that he's "looking to do new things." A link to Hester's biography off AMD's executive Web page defaults back to the home page.

Hester came to AMD from IBM in September of 2005, when the chipmaker was flying high on the success of its Opteron server processor. He's leaving at a low point for AMD, having presided over the debacle that was AMD's quad-core server processor, Barcelona. Barcelona finally became available in mass quantities this week after a year of delays caused by technical glitches and design issues.

Rob Keosheyan, an AMD spokesman, said Hester's involvement with Barcelona was not "hands on," although his biography on AMD's site said Hester was "responsible for setting the architectural and product strategies and plans for AMD's microprocessor business." Keosheyan said that was an "outdated" description of what Hester's day-to-day responsibilities were at the company.

Most of Hester's time was spent tackling AMD's ambitious Fusion project, which is now known as its accelerated computing initiative. Fusion is AMD's plan to integrate a graphics processor onto a CPU, and was the inspiration for the company's acquisition of ATI Technologies in 2006. But the first chip designed in this manner, a notebook chip code-named Swift, isn't expected to arrive until the second half of 2009, leaving quite a gap between now and then for Hester's replacements to iron out the kinks.

It's true that Hester isn't being directly replaced, Keosheyan said, but Hester has worked to "distribute" the CTO's responsibilities across individual business units, like server chips or graphics chips. As of next week, the individual CTOs will report to their business unit leaders, such as Mario Rivas, head of the processor group. One exception will be the accelerated computing initiative, which will report directly to President and COO Dirk Meyer.

AMD announced plans to lay off 10 percent of its workforce earlier in the week after also relaying the news of a revenue shortfall.

AMD executives put their best foot forward Thursday during a conference with financial analysts, but only time and a better performance will lift the company out of its 2007 spiral.

The company owned up to its mistakes with Barcelona, its first quad-core server processor, during the conference call. Barcelona will have to be tweaked before it can be sold for general-purpose use, and the revamped chips won't be available until the first quarter of 2008, said Mario Rivas, executive vice president for the computing products group. Systems using Barcelona aren't expected to be available until the second quarter, meaning that for most customers, the chip will arrive a year later than expected.

AMD executives tried to point out all the good things the company had accomplished during 2007 during its presentation at the New York Stock Exchange, and CEO Hector Ruiz vowed to exit 2008 at the helm of a profitable company.

"There are times in your life where you feel that the perspective of those around you is quite a bit different than the perspective you have yourself," said Dirk Meyer, AMD's president, chief operating officer, and heir apparent, during the analyst conference. "We have done a lot of things very well at AMD since Q1 and we have done one thing poorly. We haven't delivered on our quad-core products according to plan."

So what does AMD think it did right? Four of the seven bullet points it cited had to do with market share gains, or market share position. This is true, in that AMD has held pretty steady in the PC market over the past year despite its struggles. The trouble with that, however, is that AMD's gains are mostly at the low, unprofitable end of the PC market, according to data from CurrentAnalysisWest.

Still, the company noted that its average selling prices are "trending" higher, and it can say that because Phenom desktop chips and Barcelona server chips will be in the market soon. Also, it seems like PC demand is actually pretty strong in the face of broader economic uncertainty, as demand for AMD's chips (really, all PC chips) has been strong.

Of course, AMD's first job is to put out chips that work. And on that note, the company seemed quite contrite, but the damage has largely been done.

Looking forward to 2008, one good piece of news is that AMD says it's on track to release 45-nanometer processors around the middle of the year, which means it'll hit its aggressive target for switching from 65nm to 45nm. The number refers to the average size of the structures on the chip, and the smaller you get, the more transistors you can fit onto a chip, improving performance.

The company also revealed plans to ship an eight-core server chip in 2009 called Montreal, and a notebook chip called Swift that will be a result of its Fusion project to integrate the PC processor and the graphics processor.

But AMD said nothing about its so-called "asset-light" strategy, which it has been ducking for months. Earlier this year the company hinted that it was considering plans to outsource more of its chip production to third parties like TSMC or its current partner, Chartered. But Doug Grose, senior vice president of manufacturing and supply-chain management, said the company still isn't ready to talk about what exactly that means.

CNET News.com's Dawn Kawamoto contributed to this report.

AMD will be forced to delay the ramp of its Barcelona server processor after running into a bug, the company has confirmed.

Barcelona, AMD's first quad-core processor for servers, is shipping to some customers in the high-performance computing market. But the company had hoped to start shipping it to a wider variety of customers this month, as well as introduce a faster model that could better compete with Intel's latest Penryn chips.

Unfortunately for AMD, that's going to have to wait, according to a company spokesman. The Tech Report has an excellent description of the problem that AMD encountered with the translation lookaside buffer used in cache memory, which also affects the Phenom desktop chips. I'm not even going to attempt to explain to you exactly what that means, check out Scott Wasson's article for a detailed look at that. Bottom line, however: Barcelona's arrival on the main stage is going to be delayed, again.

Even though the company has developed a workaround for the errata, this is awful news for AMD. Every chip company will come across errata (think of them like bugs in a new OS release) with the arrival of a new chip. Most of them are minor, and can be fixed pretty quickly after launch with a simple code update. This one requires a bit more work, hence the delay. Still, it's far from a disaster: it's not like AMD is recalling the chip.

The problem is more one of confidence in the company's ability to get products out the door. By the time Barcelona really starts to hit its stride in the first quarter of next year, it will have been almost a year since AMD originally intended to launch the chip. AMD needs Barcelona not only as a boost for the company's psyche but also as a profit engine: server chips are way more profitable than PC chips.

And in the meantime, Intel is firing on all cylinders. Its second-generation Penryn quad-core processors are available from server vendors and in standalone boxes from companies like Newegg. And the next generation of chips, called Nehalem, will borrow the design techniques that have made AMD's chips so successful over the last few years.

AMD's stock fell 3.68 percent to a 52-week low of $8.91 Tuesday on the news, which also prompted a financial analyst to cut a revenue estimate. This came on a day when the overall market was up sharply.

The planned launch of Intel's Penryn processors on Monday is the first blow in a one-two punch that might stagger AMD heading into 2008.

Just a few months after the launch of AMD's quad-core Barcelona chips, Intel is hitting back with Penryn, now known as the Xeon 5400 family of processors. A total of 15 server chips are set to launch Monday as well as a new Core 2 Extreme desktop processor, with Penryn chips for mainstream desktops and notebooks scheduled to launch in the first quarter of next year.

Penryn is essentially a shrink of the Core architecture that brought Intel out of the woods in 2006. But these are also the company's first chips to use Intel's 45-nanometer manufacturing technology, and they will usher in the first change to the basic properties of the transistor since the 1960s.

For the first time, Intel plans to use a metal gate and a new material for the oxide layer around the gate in its transistor designs. This fundamental part of the transistor provides the foundation for computing as the part that determines whether a transistor is off or on, a "0" or a "1."

"We needed the scaling and power/performance, and it would be very hard to do it on the previous technology," said Dadi Perlmutter, senior vice president and general manager of Intel's Mobility Group.

Intel and other chipmakers were running into problems making the gates smaller and smaller. The gates were getting down to the point where the gate dielectric--an insulating layer that sits between the gate and the rest of the transistor--was only a few atoms thick. The chipmaking industry has figured out lots of amazing things, but it hasn't figured out how to split an atom without causing a bit of an energy problem.

The new materials allowed Intel to build thicker gates with the same switching properties as the older ones, which helps control current leakage and also buys the industry a few more generations of scaling. IBM and AMD plan to release chips based on similar technology in 2008.

And the combination of the new transistors and some design tweaks appears to have been enough to give Intel a performance lead with the Penryn generation of chips. The company said some of its partners set world records for scores on well-known benchmarks such as TPC-C and SPECint_rate2006 with the basic Xeon chips. When paired with the 1600MHz front-side bus available on some chips, Intel said it also set records on SPECfp_2006rate, long a stronghold of AMD's. SPECint_rate is a general measure of transactional performance that's important to business customers, while SPECfp_rate measures floating-point performance and is important to high-performance computing customers.

Intel avoided making direct comparisons to AMD's chips in briefing materials distributed ahead of the announcement. It plans to have a Web site up and running on Monday with more detailed performance information.

Intel did say that the new Xeons will be about 28 percent faster than their older brothers on SPECint_rate2006, and 30 percent faster on SPECfp_rate2006. Barcelona barely edged out the older generation of Xeon chips on SPECint_rate2006, so it looks like Intel will have an edge in that area.

If you make a server-buying decision based solely on these numbers, however, you're making a mistake. There are some truths to benchmarks, but companies like Intel and AMD spend millions of dollars trying to get an edge on benchmark results, which don't always mirror real-world performance. Still, they're the best comparison vehicles we've got, though those who are contemplating a serious server purchase test their applications on a system before making the leap.

Penryn marks the second generation of Intel's quad-core designs. Around this time last year, Intel packaged its dual-core Core generation processors into quad-core chips that enjoyed several months free from competition from AMD.

That free ride ended with the Barcelona launch. AMD gained back some market share in the third quarter, as Barcelona systems trickled into the market. Still, going into the launch the company didn't expect Barcelona to contribute meaningful revenue until the fourth quarter.

And it seems that AMD is having a little trouble getting Barcelona into the market. Reports surfaced last week in the run-up to the Penryn launch that some server vendors are quoting 2008 as the time frame for Barcelona's availability, even though AMD executives said they plan to ship "hundreds of thousands" of Barcelona chips this quarter.

That, of course, is exactly when Intel will fire back with the Penryn chips. The new Xeons will arrive in the same pricing bands that Intel's current lineup of Xeon chips occupy, and Intel plans to have systems available right away from the usual suspects in the server market.

And next year, it will get even tougher for AMD. The company has two new designs for desktops and notebooks (known as Spider and Puma) that are set to arrive over the next few months. But Intel isn't sitting still, either: the first quarter of next year will see Penryn chips arriving for desktops and notebooks, as well as an extremely low-power chip called Silverthorne that could open new markets for Intel that AMD can't touch until 2009.

To top it all off, Intel's main plan for 2008 is to release chips called Nehalem that borrow many of the same design techniques, such as an integrated memory controller and point-to-point connections, that made AMD's Opteron chips a winner for several years. AMD would say it's a sign that it was right all along, but it doesn't really matter: Intel has managed to stay very competitive without those techniques, and when it adopts them, AMD could be in more trouble next year.

The smaller chip company is clearly pinning its hopes on 2009, when it aims to release "Fusion" chips that integrate a high-powered GPU with a PC and server processor. The "Bulldozer" chips will also be assembled from smaller building blocks, which could let the chipmaker target specific customers with designs tailored for their needs.

For now, though, Intel is in excellent shape--assuming it doesn't run into any problems during the first few months of the Penryn launch. In just two years, Intel has managed to get beyond the embarrassment of its abrupt change in course at the hands of AMD to get its server group back on track.

Few of us will ever buy a server based on these chips, but this market is extremely important to both Intel and AMD because it's so much more profitable than cranking out chips for your desktop or notebook. That helps fund the development of other technologies that do have an impact on the rest of us, meaning that the competitive balance between the two companies in this segment has far-reaching implications.

For now, advantage Intel.

AMD CEO Hector Ruiz launched one of the most important products of his tenure Monday night.

(Credit: Tom Krazit/CNET News.com)

AMD's Barcelona party kicked off Monday night in San Francisco, and the relief was palpable on many faces.

The company formally unveiled Barcelona, AMD's first quad-core server processor, during an event spread over two buildings in San Francisco's Presidio district. The Presidio was once an army base when it made sense to guard the Golden Gate with cannons. AMD executives, employees and partners seem ready to emerge from their bunkers after months hunkered down waiting for cover.

Barcelona gives AMD that cover. "Barcelona was designed to win in four key areas: performance, investment protection, virtualization and energy efficiency," said CEO Hector Ruiz while onstage at the Letterman Digital Arts Theater inside LucasFilm's facilities.

The chip isn't quite the breakthrough in performance in its current incarnation that AMD was hoping for, as we covered earlier this week. But AMD shared some new performance data Monday night that it chose not to include in its initial launch materials.

One thing we noticed that was conspicuously missing from AMD's launch materials were scores for Specint_rate2006, an important measure of performance that corporations use to judge processor performance for transactional types of workloads such as e-mail servers or databases. A little extrapolation revealed that AMD trailed Intel's chips by a fair amount in this category, which appeared to take a bit of the shine off AMD's launch.

But the company had a new PowerPoint slide Monday night that addressed Specint_rate2006 performance, and it's all about the compiler. That's the piece of software that translates application code into the machine language used by processors.

The new Barcelona performance slide--if accurate--addresses some concerns about the chip's integer performance.

(Credit: Tom Krazit/CNET News.com)

Using the GCC compiler developed by the Free Software Foundation, which AMD server chief Randy Allen called "the most predominant compiler," AMD said Barcelona beat Intel's Xeon 5345 processor by 9 percent. When Intel's own compiler was used against the PCG compiler, Barcelona trailed the Xeon chip by 5 percent on the SpecINT benchmark.

A few analysts in attendance confirmed that that GCC compiler is widely used, even over Intel's compilers on occasion. Still, AMD didn't provide the actual scores for that benchmark, just the comparison against Intel, so it's unclear what particular tests it was referring to in the slide.

One other advantage this time around, compared with AMD's initial Opteron launch in 2003, was the partners backing the company on stage. VMware CEO Diane Greene joined Ruiz and Allen to tout the performance of Barcelona when it comes to virtualization, which should be a major topic this week with the VMWorld conference in town. Sun Microsystems CEO Jonathan Schwartz talked up his company's partnership with AMD, despite the warming of ties earlier this year between Intel and Sun. And representatives from Dell, Hewlett-Packard and IBM also made appearances during AMD's event.

Free food, free booze, but the price was a 90-minute marketing presentation. Oh well.

(Credit: Tom Krazit/CNET News.com)

Right now, Barcelona is a little underwhelming, but the company confirmed a 2.5GHz version is on the way for later this year, which should provide a boost to its performance scores. As the company gets closer to 3GHz, it seems Barcelona really starts to shine. We'll have to see if that translates into the profits AMD desperately needs.

The "complicated" design that AMD chose for Barcelona, its first quad-core server processor, caused more than six months of delays before the chip was ready, CEO Hector Ruiz told the San Jose Mercury News.

In an interview published in Sunday's Mercury News (the excerpts don't seem to be online yet), Ruiz said "every time we ran into a gotcha (or a technical glitch), it created a six-week-or-so hole in the schedule as we went back and fixed it. We hoped we wouldn't get many of those, but in the Barcelona case, we got more than we thought. By the time we got through fixing them all, we were six months-plus later from where we originally wanted to be."

That's been a very difficult six months for AMD, as its server division suffered through a price war without a fresh new product to parade before server buyers.

The September launch of Barcelona will come six months later than AMD had hoped, according to its CEO, Hector Ruiz.

(Credit: AMD)

AMD chose to put four processor cores on a single piece of silicon when creating Barcelona. The company thinks that this will deliver better performance than Intel's method of building a quad-core chip, but it was trickier to implement. Intel simply put two dual-core chips together in a single package, and while that won't win any awards from chip design purists, it did allow Intel to ship quad-core chips in November of last year. Barcelona is only now shipping to AMD's partners, and it will be formally launched on September 10, Ruiz confirmed.

The delay, along with Intel price cuts, forced AMD to significantly discount the prices of its dual-core server chips to compete and eroded its profits. You have to wonder whether AMD could have released a packaged quad-core chip months ago while still working on Barcelona if it had bit the bullet and given up on its "native quad-core" marketing strategy.

That might have erased AMD's biggest advantage over Intel: the integrated memory controller it uses to deliver a fast pipeline between the processor and system memory. And given AMD's manufacturing constraints late last year while waiting for its new 65-nanometer facility to come online in Dresden, packaged quad-core chips might not have been feasible.

But you've got to think that AMD would have loved to have any kind of quad-core design out earlier this year, so it could have competed against Intel's Xeon chips without having to resort to bargain basement pricing. And that might have been worth further delays to Barcelona, even though Intel is getting ready to launch its second-generation quad-core Penryn chip before Thanksgiving.

It looks like AMD will raise the curtain on its Barcelona server processor at George Lucas' office on September 10.

The company's PR firm sent out invitations to "the most anticipated premiere of 2007," which I would have thought was The Simpsons Movie (go see it, it's better than I thought it would be), but which for AMD is most definitely Barcelona, its long-awaited quad-core server processor.

AMD needs Barcelona to get its server division back on track. The company has been forced to cut the prices of its dual-core Opteron chips to compete with Intel's quad-core Xeon processors, eroding its profit margins when coupled with an ongoing price war.

AMD's Barcelona will probably be behind that curtain on September 10.

(Credit: AMD)

An AMD spokesman wouldn't explicitly confirm whether the event, to be held at the Letterman Digital Arts Premier Theater at the headquarters of Lucasfilm, will see the debut of Barcelona. But AMD has said it plans to ship Barcelona "for revenue" in August, reiterating that schedule last month at its analyst meeting. That's the term generally used when a chip is shipping to server or PC companies but those companies aren't ready to launch their systems.

In other AMD news, the company issued another round of debt Thursday to pay off an outstanding loan with Morgan Stanley. The new $1.5 billion in long-term debt erases the company's obligations to Morgan Stanley in paying for the acquisition of ATI Technologies.

SUNNYVALE, Calif.--AMD will unveil a new chip design in 2009 for the server market and faster versions of its Barcelona quad-core chip later this year, company executives said Thursday.

AMD's near-term goal is to get its Barcelona quad-core chip out into the market. The company has already said it plans to launch Barcelona chips at 2GHz later this quarter, but it also plans to ship faster versions of those chips in the fourth quarter, said Randy Allen, corporate vice president of AMD's server products division, at a technology analyst meeting at the company's Silicon Valley headquarters.

The 2GHz launch speed had underwhelmed analysts who were expecting a faster debut from Barcelona, a quad-core server chip that AMD desperately needs to shore up the average selling prices of its server chips. Intel has been cutting into AMD's margins with its own quad-core chips, launched late last year as a package of two dual-core chips. Some purists considered that an inelegant design, but customers haven't seemed to mind.

Barcelona will come in three varieties, Allen said. The mainstream version will account for 77 percent of AMD's quad-core shipments and will debut at 2GHz. A more power-efficient version will debut at 1.9GHz, with faster speeds available later in the year, and a high-performance version will arrive in the fourth quarter at 2.3GHz or faster, he said.

But AMD also needs to show customers that it has a solid road map, so the company is trickling out details about future chips today.

Shanghai will come next year as a shrunken version of Barcelona built on AMD's 45-nanometer manufacturing technology. Both Shanghai and Barcelona will fit into chipsets that are currently available for AMD's dual-core chips.

And then, in 2009, AMD will come out with a new core design code-named Sandtiger and a new underlying platform timed to the uptake of DDR3 memory, Allen said. AMD's integrated memory controller design means that it has to tweak that controller every time a new memory standard becomes the king of the hill.

Sandtiger will use a new design Allen referred to as Direct Connect 2. This will involve four Hypertransport links on each chip, up from the current three, and will come with an AMD-designed server chipset.

Stay tuned for more details on AMD's future plans over the rest of the day. I'll update this post once I retrieve the thermal information for the three Barcelona varieties. AMD's apparently planning to show us 14 million PowerPoint slides today, and they are whizzing past.

UPDATED 10:05 a.m.: AMD let us take a coffee break, during which I found out that Sandtiger will be an eight-core processor built on the 45nm manufacturing technology. Like Barcelona, it will also be a monolithic design with eight cores all integrated onto a single chip.

AMD Chief Technology Officer Phil Hester smiled when asked just how large a chip that would be, declining to specify a die size but assuring me it would be "economically attractive." The surface area of a processor is a huge factor in manufacturing and profitability, since the larger the chip, the fewer number of chips you can cut from a silicon wafer. Jim McGregor, an analyst with In-Stat, hinted that AMD would likely have a fundamentally new--and smaller--core design for that generation to make the manufacturing folks happy.