AMD: Tier-Ones, Channel In Same Boat On Barcelona


Earlier this month the Sunnyvale, Calif.-based chipmaker revealed that a glitch on its long-awaited quad-core Opteron processors had significantly held up volume shipments since the launch of the product on Sept. 10. While a BIOS workaround has enabled AMD to ship "tens of thousands" of of the processors, codenamed Barcelona, to HPC builders and a few others in 2007, the bulk of the chipmaker's partners will have to wait for redesigned parts that should be available late in the first quarter.

But Bixler and other AMD executives have stressed that although the latest stumbling block for AMD may look similar on the surface to a channel-related debacle earlier in the year, there is an important difference. In early 2007, AMD admitted that a shortage of parts to its white box channel was the result of fast-tracking shipments to tier-one partners like Dell at the expense of system builders. AMD CEO Hector Ruiz alluded to the bitter fruit that reaped with the channel in a conference with financial analysts held last week in New York.

This time around, system builders are not being shorted on shipments in favor of tier-ones, Bixler said.

"The hard cold truth is, we are continuing to ship Barcelona to select customers, but the majority of those shipments are actually going to the channel," he said, referring to builders of HPC clusters that comprise part of AMD's white box channel. Large cluster systems are among the few for which the BIOS fix for Barcelona, which can degrade performance on the server/workstation chips by up to 20 percent, doesn't appear to be a terrible problem.

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"At a minimum, we're spreading the misery equally to our partners. It's a tough time, but we'll work through it," Bixler said.

Looking ahead to 2008, Bixler said AMD had a number of channel-friendly initiatives planned to win back system builders, mainly centered around integrated hardware platforms comprising AMD and ATI products as well as verified parts from third-party vendors. These include the ramp of AMD's Spider CPU-GPU-chipset platform for midpriced enthusiast systems launched in November, the third-generation mobile platform codenamed Puma due out by midyear, and a commercial client platform called Hardcastle that will include the option to build around the Toliman triple-core desktop CPUs due in the first quarter.

But the first objective for AMD is to get its two glitchy quad-core products, Barcelona and the new Phenom desktop processors, redesigned and rolling out of the fab, Bixler said. According to AMD, the first samples of the fixed chips should be available in January.

Bixler said channel partners were still enthusiastic about AMD's quad-core products and appreciated that the company was owning up to the serious mistakes made with their ramp-up in the second half of 2007. But he admitted that more could have been done to inform partners about the problems earlier.

"Our channel customers are appreciative that we stood up and took ownership of the issue instead of trying to market our way around it. They're still tremendously disappointed in our product situation, as we all are," he said.

"We still get feedback that, 'I wish you guys would have done that [admitted to ramp problems] a lot sooner.' But the partners I talk to, they're still 100 percent committed to this product and the longer-term story of AMD."

Design mistakes happen in the semiconductor business and AMD would fix the problem and go forward, Bixler said.

"This is far from our first rodeo. We've delivered millions of processors and we know how to do it. We dropped the ball in this instance and we're sick about it, but we're going to dust ourselves off and fix the problem and get the product out very soon," he said.