AMD’s New Lower Power Server Chip Targets Web

SAN FRANCISCO (Reuters) – Advanced Micro Devices Inc ships a lower-power version of its Opteron server chip on Monday as it tries to expand its offerings for Web hosting companies.

The company declined to give its projections for revenues from the new chip.

AMD said the new chip is aimed at companies that use servers for tasks like cloud computing, and are looking to cut power and costs related to things like air conditioning.

“We are seeing low power becoming prioritized within the IT Manager’s buying criteria. This is reflected in our processor shipments as our low power processors mix is increasing,” AMD senior manager Brent Kerby wrote in an e-mail to Reuters.

“Our new lowest power processors … (are) our fastest growing product,” he wrote.

The new chip is part of AMD’s six-core Opteron family of processors. Much larger competitor Intel Corp also has low-power chips, but its most advanced chips only have four cores.

More cores allow a chip to perform more tasks at once.

Intel, which currently dominates about 90 percent of the market for server chips, has said it will launch an eight core Nehalem chip in the first quarter of 2010.

“I don’t think this fundamentally changes AMD’s competitive position but it does give AMD a more complete portfolio and it makes their lower power offerings more attractive,” Real World Technologies analyst David Kanter said.

The server market — the worst impacted of any computing segment — was about 30 percent behind where it was a year ago due to the economic crisis, according to Mercury Research analyst Dean McCarron.

McCarron forecasts that gap will narrow in the second half and will rally to 7 percent to 8 percent growth in 2010, compared with overall PC growth of about 10 percent.