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Opteron prices reflect AMD confidence

The processors for midrange servers, to be introduced Tuesday, will range in speed from 1.4GHz to 1.8GHz, said sources, and AMD is apparently not thinking small on price.

The Opteron processors for midrange servers coming next week from Advanced Micro Devices will range in speed from 1.4GHz to 1.8GHz, said sources, and AMD is apparently not thinking small on price.

The Opteron 240 will run at 1.4GHz and cost around $340 in volume quantities, said sources, while the Opteron 242 and 244 will run at, respectively, 1.6GHz and 1.8GHz and cost around $800 and $900. Prices could change, sources cautioned, and, historically, wide discrepancies have existed between AMD's posted price and the actual prices that the chips sell for.

While the chip speeds fall within the range of expectations, the pricing underscores the confidence AMD has in the chip's selling power and performance.

At $340, the Opteron 240 will likely compete in price against Intel's 2.8GHz Xeon chip for one- and two-processor servers, although it will run at a far lower clock speed. The 2.8GHz Xeon sells for $455 in volume, while the 2.6GHz Xeon sells for $284 in volume quantities.

The Opteron 242 and 244, meanwhile, cost more than any of the Xeons for single- or dual-processor workstations and servers. These chips, however, are less expensive than the Xeon chips for four- and eight-processor servers, which start at above $1,000.

Clock speed isn't everything when it comes to measuring performance. The Opteron chips will come with 1MB of cache, which is a performance-enhancing reservoir of memory located on the same chip as the processor. The low-cost Xeons come with 512KB of cache. The $1,000-plus models for four- and eight-processor systems come with 1MB of cache.

AMD declined to comment.

Offering chips for higher prices than Intel marks a change for AMD. Typically, the company has had to sell its products at a substantial discount compared with Intel's, except during relatively short windows of opportunity when Intel was experiencing problems.

Opteron, which features an entirely new chip architecture, represents the best chance to date for the Sunnyvale, Calif.-based company to crack the corporate computing market. AMD's chips primarily get used in consumer PCs, or in desktops aimed at small- to medium-size businesses.

Opteron, however, will sport a variety of technical enhancements that will not be seen in Intel chips. The chip runs 32-bit software, the kind used on most desktops today, and 64-bit code, seen on high-end servers.

Additionally, the chip connects to other processors and components through HyperTransport, a high-speed link. HyperTransport makes it easier to build four- and eight-processor systems,

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say analysts, a major engineering feat for Intel-based servers.

Moreover, the chip will reduce memory latency, or the time it takes for data to travel from memory to the processor, because it contains an integrated memory controller.

"Memory latency is a barrier to better system performance," Dirk Meyer, senior vice president of AMD's Computational Products Group, said in a recent interview.

The company will introduce the chip Tuesday in New York. A variety of smaller server vendors such as RackSaver, Newisys and Appro International have already committed to using the chip in servers, while executives from Sun Microsystems have said the company will "likely" use it in the indeterminate future.

Analysts speculate that IBM, which is helping AMD develop chip-manufacturing technology, could also one day adopt it.

In terms of software, SuSE will release a 64-bit version of Linux for the chip, while Microsoft is working on a 64-bit version of Windows that will likely emerge later in the year or in 2004. IBM has also agreed to port its DB2 database to Linux-Opteron machines.

AMD on Tuesday is also planning to talk about a 100 series of Opteron chips for single-processor systems, and an 800 series for eight-processor servers. These different chip families will vary by speed, price and cache size.