AMD to delay Phenom release to 2Q08 14 January, 2008 By Liam Lahey

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Though there was no mention of any delays at AMD's annual analyst meeting last month, the world's number two chipmaker said it would focus on manufacturing triple-core chips in the meantime and execute the launch of two energy-efficient Phenom processors.

Warren Shiau, associate partner, lead analyst, IT research, The Strategic Counsel, said AMD's quad-core Barcelona-based Opteron and Phenom volume shipments wouldn't begin until sometime in Q2.

"The fix they've got right now carries a 10 per cent to 20 per cent performance drop . . . all together the delays and performance hits put AMD in a price-performance position that keeps on deteriorating," he said. "Technically, AMD have done many elegant things and Barcelona ought to come good in the long run, but over the next two to three quarters it looks like they are going to have to take big margin hits to move product because their intros and production ramps aren't keeping pace with Intel."

However, Shiau noted there's a possibility AMD could be hurt so bad financially that it won't have the means to compete on an equal footing when Intel delivers its new micro-architecture (Nehalem --scheduled for late 2008 or early 2009 release). AMD's market share would then be "pinned" by Intel to whatever seems like a "safe" amount that won't raise the ire of anti-trust.

"Hopefully that doesn't happen," he added.

According to Jake Whitman, spokesperson for AMD in Austin, Texas, the decision to move production for the Phenom 9700 and 9900 to 2Q08, was due to a shift in AMD's strategy to launch an energy efficient Phenom quad-core processor in 1Q08 to address customer and industry demand.

"This change is viewed favorably by our partners who really want the energy efficient and triple-core parts," he said, "The volume of the quad core market is in mainstream, and will be served through our current offerings, AMD Phenom 9500 and 9600 quad-core processors."

AMD launched its highest-volume versions of AMD Phenom quad-core processors in mid-November (models 9500 and 9600) and it shipped hundreds of thousands in 4Q07, he said adding, OEMs demonstrated production AMD Phenom processor-based desktops during 2008 International CES recently.

Michelle Warren, senior IT analyst, Info-Tech Research Group, said despite the news, she expected AMD to pick up steam over the next couple of quarters.

"I expect to see a lot of activity from AMD and this commitment to quality, which has set them back slightly on the Phenom release will serve them well in 2008," she said.

It was a turbulent news day for both AMD and Intel. Despite the Phenom delay, no doubt AMD executives were elated to hear Intel would be investigated for alleged anticompetitive business practices.

On the same day as the launch of its hotly anticipated Clear Bay processors, Intel learned it would face an anti-trust investigation into its competition practices as New York State Attorney General Andrew M. Cuomo served a wide-ranging subpoena seeking documents and information on Intel.

Cuomo is investigating whether Intel violated state and federal anti-trust laws by coercing customers to exclude AMD from the worldwide market for x86 CPUs.

The subpoena served on Intel seeks documents and information concerning Intel's pricing practices and possible attempt to exclude competitors through its market domination. The information sought is relevant to whether Intel, among other things:

*Penalized its customers, primarily computer manufacturers, for purchasing x86 CPUs from competitors;

*Improperly paid customers for exclusivity;

*Illegally cut off competitors from distribution channels.

Modern x86 CPUs are currently the industry-wide standard for a majority of desktops, laptops, notebooks, servers, and workstations. The x86 market accounts for over $30 billion (U.S.) in annual worldwide sales, with Intel retaining the lion's share of the market, estimated at 90 per cent by revenue and 80 per cent by volume.

"Protecting fair and open competition in the microprocessor market is critical to New York, the United States, and the world," Cuomo said in a statement. "Businesses and consumers everywhere should have the ability to easily choose the best products at the best price and only fair competition can guarantee it. Monopolistic practices are a serious concern particularly for New Yorkers who are navigating an information-intensive economy."

"New York State's decision, based on its findings to date, to open a formal investigation of Intel's anticompetitive business practices is good news for computer buyers in N.Y. and throughout the United States," said Tom McCoy, AMD's executive vice president, legal affairs and chief administrative officer. -30-