Start-up change of heart derails AMD plans
In a blow to Advanced Micro Devices, chipmaker HotRail will focus on the networking market and shelve plans to develop chips that would have helped AMD get into servers.
HotRail had been working on a chipset, a collection of chips that connects the processor to the rest of the computer, that would have allowed computer makers to build six and eight processor servers using Advanced Micro Device's (AMD) Athlon chip. Servers remain one of the most profitable markets for processor manufacturers. To date, Intel has experienced virtually no competition from its leading rival.
But HotRail determined late last year that the opportunity was greater in the networking sector, so the company has shifted its energy after getting approval from its board, said HotRail chief executive Rick Shriner.
"The reality is the technology itself was very easy to transfer into the communications market," Shriner said in an interview. "It was more a mental problem to go through in a small company than a technical problem."
On Monday HotRail announced two products: the HotRail Channel, a high-speed chip to connect networking chips, and the SkyRail Link to connect switches and routers. Both products depend on a "switched fabric" design. With switched fabric, a group of chips creates a high-speed miniature network inside a computer. Among its other advantages, switched fabric technology can simplify design issues for upstream hardware makers.
"HotRail is following in a long line of start-ups that have decided that some of their technology was better suited to another market than was originally planned," said industry analyst Nathan Brookwood of Insight 64.
AMD division planning manager Byran Longmire said HotRail's move was understandable given the opportunities in communications and the valuations being given to networking chip makers.
"We wish them well, but we are disappointed," Longmire said. However, Longmire said AMD plans to come out with its own two-way chipset later this year and expects to move beyond that late next year when it introduces its next-generation processor, code-named SledgeHammer. Another chip set maker, API, had earlier said it will deliver two-way chipsets later this year.
As for AMD, Brookwood said the lack of HotRail's chipset probably won't hurt the chipmaker in the near term, as it isn't yet at the stage to sell into the high-end server market. Shriner also suggested that AMD was not moving quickly toward needing HotRail's solution.
"AMD is in such a race on speed with Intel that their ability to do the upfront marketing effort to get into the server market is somewhat limited," Shriner said.
HotRail is not the only company that sees the potential for transferring high-speed bus designs from the PC market to the networking arena. Memory designer Rambus earlier this year announced that it will begin to license a high-speed chip-to-chip interface for the networking market.
In the new market, HotRail competes with PMC-Sierra, which also promotes switch fabric, as well as the networking gear makers' own chip units which often design their own fabric to connect to chips from makers such as Vitesse Semiconductor.
The HotRail Channel can transfer data at speeds up to 16 GB per second. That chip is priced at $129 in quantities of 1,000 and is expected to be in production this quarter. The SkyRail Link will be available in speeds of 3.13 GB/sec and 2.5 GB/sec. In volume, the chips are priced at $37 and $34 respectively, and are slated for volume production next quarter.
Shriner said the company expects to make its first customer announcements later in the second quarter.
As to whether HotRail will ever deliver its PC-oriented chip set, Shriner said that remains to be seen.
"Whether we do or not will depend on where our business is at the time," he said. "We have a direction that looks very fruitful right now."