Intel, AMD Square Off With Nehalem And Shanghai

Even as Intel and AMD go head-to-head on CPUs, the graphics side of AMD's house actually stands to gain from its long time rival's success with Nehalem. AMD acquired graphics chip maker ATI more than two years ago, but it still takes some getting used to when an AMD spokesperson like Rick Bergman openly praises Intel's Core i7, as he did in a recent chat with CRN.

Bergman, the GM of AMD's Graphics Product Group, has reason to hope for steady adoption of Intel's new desktop chips, particularly the Core i7-965, which is already being called the best desktop processor on the market by CRN's Test Center, among other reviewers.

That's because AMD's discrete graphics products stand to benefit from Core i7 sales right out of the gate for a couple of reasons. For one, AMD appears to have wrested the GPU performance crown from market leader Nvidia, Santa Clara, Calif., with its ATI Radeon HD 4000 series of graphics cards, particularly the Radeon HD 4870 X2. Another is that AMD was quicker to validate its CrossFire technology for the new Core i7 platforms than Nvidia was to greenlight Intel's X58 chipset for SLI, as confirmed at the San Francisco Core i7 launch by Pat Gelsinger, GM of Intel's Digital Enterprise Group.

The top two parts in the initial Core i7 lineup are tailor-made for enthusiast rigs and the "mainstream" 2.66GHz chip is a monster in its own right, meaning discrete graphics are going to be added to most systems featuring Intel's newest desktop processors. Right now, anecdotal evidence suggests AMD is winning the battle to get its cards into Core i7 systems -- of about a dozen custom-built Core i7-965, Core i7-940 and Core i7-920 rigs showcased at the San Francisco event, two-thirds featured ATI graphics.

Don't count Nvidia out for long, though -- CEO Jen-Hsun Huang, while admitting recently that the performance of the top ATI cards had taken Nvidia by surprise, promised his company would have an answer early next year.

And don't count on some synergy between Intel and AMD over high-end graphics to be the dominant story in the months ahead for these two bitter rivals. Especially worth watching will be the introduction of DDR3 on the upcoming Nehalem server chips, a crucial area where Nehalem and Shanghai, for all their similarities, will be very distinct.

Benchmarking battles will also be fought over the new features built into the chip makers' new processors that handle increasingly important technologies such as power management and virtualization. And the rate of adoption for Nehalem and Shanghai could be very different, particularly in the part of the IT reseller channel serving commercial customers and data centers.

Even in the best of times, IT purchasers are wary of moving quickly towards an entirely new hardware platform and the upfront expenditures that entails. In this uncertain economy, it's unclear how fast even stunning new technology like Intel's Nehalem architecture will be adopted. One regional system builder and major Intel partner told ChannelWeb he expects to still be delivering nine out of 10 processors based on the older Core architecture well into 2009. AMD's Shanghai chips, on the other hand, drop right into existing Barcelona platforms and that could mean a more robust initial reception for the new Opterons relative to existing market share.

The upside for the channel is that in these tight economic times, a clear-cut winner on value between Intel and AMD should trump brand loyalty, according to system integrator Cameron Janzen.

"People are way more open-minded to other technologies when it means a better bottom line for them," said Janzen, VP of marketing at Pro-Data, Calgary, Alberta, at the recent Xchange Tech Innovators event in San Jose, Calif.

May the best chip win.