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Update: Are three cores better than two? Consumers now get the chance to decide. AMD's X3 Phenom processors are available in low-cost consumer systems from Hewlett-Packard (HP), Gateway, and eMachines.

Also, on the quad-core front, AMD said Wednesday that Dell is offering five server platforms based on the AMD "Barcelona" Opteron processor.

Gateway model GT5670 with Phenom X3 is priced at $549

(Credit: Best Buy)

The AMD Phenom X3 8400 (2.1GHz) and 8600 (2.3GHz) are the first mainstream x86 processors to use three cores. "The value proposition is simple. Three cores versus two cores. You make the choice," Pat Moorhead, VP of Advanced Marketing at AMD, said in a recent interview.

The Gateway model GT5670 packs an X3 8400 processor (2.1GHz) with 2MB of L3 cache memory, 3GB (PC2-5300 DDR2) of main memory, an Nvidia GeForce 6150 SE graphics card, and a 320GB Serial ATA II hard disk drive with 8MB cache (7200 rpm). This configuration goes for $549 at Best Buy.

The HP Pavilion a6430f is eerily similar. It also comes with an X3 8400 Phenom, 3GB PC2-5300 DDR2 memory, and Nvidia GeForce 6150 SE graphics. However, instead of a 320GB hard disk drive, it doubles the capacity with a 640GB drive. This system is priced at $679. HP also offers the Pavilion a6450z series on its Web site with the X3.

The eMachines J4509 is being sold in Japan and features an X3 8400 and AMD 780G integrated graphics. With a 19-inch LCD display, it retails in Japan for just under $1,000.

The initial Phenom X3 processors will ship as the B2 "stepping" or version. The follow-on versions in the channel will be the B3, said Moorhead. The B3 version fixes the TLB bug, which AMD has said all along is an extremely rare occurrence and affects virtually no one except, possibly, very high-end customers. Any chips designated with a "50" suffix will be a processor that implements the fix in silicon.

AMD also recently announced the availability of four new Phenom X4 processors with the TLB bug fix. Led by the AMD Phenom 2.5GHz X4 9850 Black Edition processor (which is designed to be overclocked) and 2.4GHZ 9750, these CPUs will be matched with the AMD 790 series chipsets. The quad-core Phenoms are targeted at higher-end gaming segments.

In related news, AMD announced Wednesday that Dell servers using the quad-core AMD "Barcelona" Opteron processor include the PowerEdge SC1435, 2970, M605 blade server and 6950 platforms, as well as the new PowerEdge T605 tower server. Dell follows HP which already lists its ProLiant G5 servers with quad-core Opteron processors.

AMD's processor business has been in the dumps for well over a year. But a resumption of quad-core shipments and a reduction in its workforce, though painful, may signal a turnaround.

AMD quad-core Opteron finally on its way to computer makers

(Credit: AMD)

Before we get to the good news, let's first consider a draconian scenario for Advanced Micro Devices. As the chipmaker was announcing Monday that it would lay off 1,650 employees later this year, the stock was hovering just above $6, down from the mid-$20s a year ago and about $40 two years ago. If things do not improve, the company may split in two, according to Ashok Kumar, an analyst at CRT Capital Group.

Kumar sees one scenario in which AMD bifurcates into a manufacturing concern and a design company. If earnings don't trend up by the second half, this is a real possibility according to Kumar. "They don't have too many options with the debt overhang (from the ATI acquisition)," he said. The soft economy may not help matters either.

Kumar listed the well-known reasons for AMD's profit shortfalls: Lack of competitive offerings, blended ASPs (average selling prices) well below Intel's, and the delayed ramp of the high-end quad-core Opteron.

But these negatives--so the upbeat narrative on AMD goes--are the chipmaker's past, not its future. After a very long delay (about one year), AMD's quad-core Barcelona for servers is just about set to ship to the largest computer companies in the world: IBM, Hewlett-Packard, Sun Microsystems, and Dell, among others. "Barcelona ASPs are 300 (dollars) plus. That historically has been the profit pool of the company," Kumar said. Once AMD ramps Barcelona and the desktop quad-core Phenom, things should "dramatically improve," he said.

And AMD's mobile offerings are getting better too. "They were probably at their weakest point in 2007," said Dean McCarron, founder and principal of Mercury Research. "The next design cycle for notebooks is happening right now. You can safely say that they are more competitive than they were last year" vis-a-vis Nvidia, he said.

Along these lines, AMD is slated to bring out the "Puma" mobile platform this quarter. Puma is based on the RS780M chipset and AMD's dual-core Griffin processor--now called the Turion Ultra. The new Turion is all about power consumption (to reduce power, each core can run at different frequencies) while the RS780M, AMD claims, is up to five times faster than Intel's current X3100 integrated graphics silicon.

Partnerships may also be helping AMD in the mobile market. "They've been partnering with some of the most aggressive OEMs out there. That plays to their favor," said Jim McGregor, an analyst at In-Stat. "Companies like Acer and Toshiba have been extremely aggressive worldwide, especially in North America, at gaining market share," he said.

The desktop is looking better too, with the triple-core and quad-core Phenom processors just beginning to ship in volume.

All this optimism is cautious, of course. "The competitive environment that they're in now is a little bit different than the one that they were in before. Intel is much stronger," said McCarron. "We have Nehalem (the next-generation Intel microarchitecture) coming at the tail end of the year and the Penryn products are very competitive," he added.

AMD also said Monday that it expects to post first-quarter revenue of $1.5 billion, about 15 percent lower than the fourth quarter. This is well below seasonal declines. So upcoming earnings could be ugly in some respects. "Plus the pullback in consumer and business spending. Q2 tends to be a little bit low in terms of revenues," McGregor warned, referring to factors that affect both Intel and AMD. "They're facing a little bit of headwind in terms of economic and spending conditions."

And all of the positives cited above may happen slowly for AMD. "Things don't swing overnight. They take time," McGregor said.

AMD has lost the CPU benchmark war to Intel--for now. But there's another--possibly more important--fight brewing in GPUs. Here, AMD is in the thick of it.

First the bad news. The Phenom X4 processor reviews that followed the Thursday announcement made it clear that AMD will not catch Intel anytime soon. Though some reviews were couched in vaguely optimistic language such as "AMD is back in the game," the bottom-line benchmarks don't lie.

"This $235 CPU (X4 9850) comes in only $10 less than Intel's comparable quad-core chip, but with noticeably slower performance on almost every one of our tests," Rich Brown said in a CNET review. Another review at ARS Technica cited the X4 9850 as "a decent alternative" but "still unable to match or surpass the (Intel) Q6600 at 2.4GHz."

Graphics is another story, however. The Phenom triple-core processor combined with AMD's 780G-based integrated graphics, a new hybrid graphics option, and competitive pricing could give AMD a leg up on Intel in the consumer segment. And it could help get AMD chips into a broader selection of popular PC models as a big spring refresh design cycle approaches for computer makers.

Pat Moorhead, vice president of advanced marketing at AMD, had a lot to say about AMD's 780G hybrid graphics technology and why having a better graphics processing unit (GPU) is sometimes better than merely having a faster central processing unit (CPU). Moorhead's point is that graphics are taking on more of the overall processing load and it's sometime a better value proposition to have a faster graphics chip rather than a faster CPU.

This is where hybrid graphics can play a role. To date, adding a "discrete" (standalone) graphics card would disable the integrated graphics, making it virtually useless. Hybrid graphics allows a graphics add-in card to utilize the integrated graphics chip that is already present in the computer. In essence, providing a low-cost dual-GPU solution. This will match up well with AMD's X3 triple-core processor, Moorhead said.

"That's where the huge value kicks in. Slip in a $50 (HD 3450) graphics card and on a $599 system you can do Call Of Duty 4. Not at HD levels, at lower resolutions, but at a price point you couldn't even dream of before," he said. The 780G by itself is also more powerful than previous integrated graphics chips and is the only integrated solution to do low-cost Blue-ray off-loads, he added.

The downside is that the 780G hybrid graphics is a new, relatively untested technology that applies mostly to games--and has been shown to be inconsistent. (Future driver revisions will probably rectify this, however.) Also, other configurations may offer better price performance. "If 3D gaming is what you're after...you'd be better off with...a less-expensive dual-core chip and a better 3D card," CNET's Brown said.

Technical problems and configuration permutations aside, the gist of what Moorhead is saying echoes Nvidia's rallying cry: graphics are becoming more important than the central processing unit as visualization applications increase.

Jen-Hsun Huang, Nvidia's president and CEO, made this price performance argument during the most recent earnings conference call. In short, users can save money by buying a system with a lower-performance Intel CPU and high-performance GPU--and get better price performance overall than the other way around.

Whether the market is buying into this argument or not is not clear. AMD-ATI--along with Nvidia--has to convince people that having better graphics is, in every day use, actually more necessary than a better CPU with Intel-integrated graphics.

Also, the market is actually moving in the opposite direction in some respects. "Web browsing and e-mail we've long been saying is not very taxing and (any graphics) was good enough. People have figured that out," said Dean McCarron, founder and principal of Mercury Research. This is creating new markets where graphics are less critical. "You look at the Netbook and you're not going to be playing Crysis on that device."

As had been expected, AMD on Wednesday announced updates to its Phenom processor line, including four new high-end quad-core chips it claims "can improve performance for gaming and multi-threaded applications," according to a company release. Among those new chips is the Phenom X4 9850, which CNET has already reviewed.

The chipmaker also announced that it is shipping its triple-core Phenom processors, a first for the PC market, as Brooke Crothers of CNET's Blogger Network details in a related blog post.

The Sunnyvale, Calif.-based company further announced what it calls "the world's first energy-efficient desktop quad-core processor, providing customers with a cool and quiet digital media workhorse." The Phenom X4 9100e operates at a maximum of 65 watts.

AMD announced Thursday that it is shipping triple-core processors, a first for the PC market. AMD also updated the quad-core Phenom lineup and reaffirmed that quad-core Opteron chips for servers will be available later in the second quarter.

AMD Phenom models

(Credit: AMD)

The AMD Phenom X3 8400 (2.1GHz) and 8600 (2.3GHZ) triple-core processors are the first processors that use three cores. This is expected to allow AMD to target price-performance points that two- and four-core processors can't easily match. "The value proposition is simple. Three cores versus two cores. You make the choice," said Pat Moorhead, VP of Advanced Marketing at AMD. "When you've maxed out your two cores...(this is an) extra core to do background tasks," he said.

The initial Phenom X3 processors will ship as the B2 "stepping" or version. The follow-on versions in the channel will be the B3, said Moorhead. The B3 version fixes the TLB bug, which AMD has said all along is an extremely rare occurrence and affects virtually no one except, possibly, very high-end customers. Any chips designated with a "50" suffix will be a processor that implements the fix in silicon.

When paired with the AMD 780 series chipset, the triple-core Phenom will deliver the greatest performance improvement--up to 30 percent compared to dual-core at the same clock speed--according to AMD.

Intel may respond to the mainstream segment challenge by changing its pricing equation. "Intel may go after it with a high-performance dual core or under price a quad core. A sub-mainstream quad core is most likely," said Dean McCarron, founder and Principal of Mercury Research.

AMD also announced the immediate availability of four new high-performance Phenom X4 processors with the TLB bug fix. Led by the AMD Phenom X4 9850 Black Edition processor (which is designed to be overclocked), the CPUs will be matched with the AMD 790 series chipsets. The quad-core Phenoms are targeted at higher-end gaming segments.

Hewlett-Packard is already offering the Phenom X3 and X4 in business PCs and will add systems to its consumer lineup too, said Thi La, director of marketing, North America Consumer Computing, HP, in a prepared statement. Dell is also expected to offer systems.

AMD also announced an energy-efficient desktop quad-core processor, the Phenom X4 9100e that operates at a maximum of only 65-watts.

The chipmaker also said that the quad-core Opteron "Barcelona" processor will be available from computer manufacturers in the middle of the second quarter.

*Black Edition

AMD roadmap

(Credit: AMD)

Dell is getting set to offer AMD's Phenom processors for the first time in systems, following Hewlett-Packard, giving the chipmaker a boost in its multi-core chip battle with Intel.

HP dx2450 business tower

(Credit: Hewlett-Packard)

AMD is expected to make an announcement related to Phenom in the near future.

In the second quarter, Dell will offer both triple-core and quad-core Phenom processors in its OptiPlex 740 business system, the computer company said. This would be the first instance of Dell using AMD processors with more than two cores. Dell is also slated to use the quad-core "Barcelona" Opteron processor in servers in the second quarter when AMD begins commercial shipments of the B3 version of that chip, which fixes the "TLB" bug.

Dell OptiPlex 740

(Credit: Dell Computer)

HP is already using the Phenom processor in its Pavilion consumer line and business line. HP's dx2450 business tower offers the triple-core Phenom X3 8600B processor (2.3GHz) and quad-core Phenom X4 8700B processor (2.5GHz), among other Phenom models.

Gateway has been selling Phenom-based systems since February.

AMD is going through a rough patch with its quad-core processors. Though launched back in September of last year, the Opteron is not slated to appear in systems until the second quarter. The Phenom processor has been used sparingly by top-tier vendors to date but this may change when B3 versions of the triple-core and quad-core chip begin to ship in volume in the coming months.