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AMD cuts prices, power of Opteron chip

Advanced Micro Devices begins shipments of low-power versions of its 64-bit processor for servers. Will the chip find the home AMD hopes for in the rack server market?

Advanced Micro Devices is adhering to the less-is-more theory as it begins shipments of low-power versions of its Opteron processor for servers.

The Sunnyvale, Calif., chipmaker on Tuesday said it would begin shipping two low-power Opterons for blade servers, starting in mid-March. The announcement fulfills a promise the chipmaker made in September. In addition, AMD lowered the prices on a number of its existing Opteron models.

AMD plans to offer two versions of the low-power processor, dubbed Opteron HE and Opteron EE. The HE chip, which consumes up to 55 watts of power, is the higher performer of the two. It will start out near the top of the company's model number system for ranking performance, with the HE 846, 246 and 146 models. The 30-watt EE chip will come in model numbers 840, 240 and 140, AMD said in a statement.

By comparison, a standard Opteron, such as the 848, consumes as much as 89 watts, according to AMD's Web site. (The first digit in each of the model numbers depicts a chip's purpose or family, while the second two reflect its relative performance. A model 46, for example, should perform better than a model 44.)

AMD designed the new Opterons for the growing market for blade servers. Heat and power consumption are major considerations for these smaller, more specialized devices, which are designed to be packed densely into racks.

Increasing the diversity of the 64-bit-capable Opteron line stands to benefit AMD by fostering higher sales and a firmer foothold in the market. The processor has been available for almost a year, and several companies have begun or plan to begin offering it in their servers. Brand names IBM and Sun Microsystems are among them, while Hewlett-Packard is also expected to use the chip. Sun's first Opteron machine will be the dual-processor V20z.

The Opteron, which is considered to be AMD's best effort to date to compete in the Intel-dominated server market, can run both 32-bit software, like most other Intel and AMD chips, and also more advanced 64-bit versions of the same software. When loaded with the proper 64-bit software, Opteron servers can handle far more memory and thus run applications such as databases or video-editing systems more efficiently than 32-bit servers.

While AMD has about a year's head start in offering a 64-bit capable processor for inexpensive servers, it won't be alone in that market for long. Intel is expected to reveal a similar 64-bit chip technology this week at its Intel Developer Forum, and it already sells the 64-bit Itanium processor, though that chip typically comes in more-expensive servers.

Besides launching the low-power chips, AMD cut list prices of its other Opterons this week.

The chipmaker more than halved the price of its Opteron 848 chip, for example, lowering it from $3,199 to $1,514. The Opteron 846 chip was reduced by about 46 percent to $1,165, and model 844 dropped by about 33 percent to $873. AMD ratcheted the Opteron 842 down by about 30 percent to $698. Model 840 is also now priced at $698, a change of about 7 percent. The Opteron 800 family was designed for servers with four to eight or more processors.

AMD also enacted price cuts for its Opteron 200 and 100 chip families, for dual- and single-processor servers and workstations. Many of the price adjustments were relatively small.

The Opteron 248, for example, fell by about 7 percent to $851. The price on the Opteron 246 chip dropped to $690, a change of about 13 percent. The price of model 146 shrank by almost 37 percent to $278. The Opteron 144 fell about 25 percent to $218, while model 142 moved down about 22 percent to $178, and model 140 fell by about 13 percent to $163.

Prices on Opteron 148, 244, 242 and 240 processors stayed the same at $733, $455, $316 and $198, respectively.

AMD expects it will be able to command a premium for its low-power Opterons. It slotted its new chips into the upper reaches of each family's price range.

Opteron 846 HE and 840 EE models list for $1,514 each. Opteron 246 HE and 240 EE models list for $851 each, and Opteron 146 HE and 140 EE models list for $733 each, AMD said.

AMD's list prices assume that customers are purchasing chips in lots of 1,000. Street prices often vary from the company's list prices.