AMD bullish on Opteron's growth

Duncan Martell

SAN FRANCISCO: The next wave of computer servers using AMD Inc.'s Opteron microprocessors will hit the market in the first quarter, building momentum for a bid by AMD to take 30 percent of that market, AMD's worldwide head of sales said.

AMD's Henri Richard said a raft of servers from Sun Microsystems Inc. and other partners would help AMD firmly establish a larger presence in the corporate computing market by the end of 2005.

"We tend to forget that Opteron is an 18-month-old baby," Richard told the Reuters Semiconductor Summit in San Francisco, referring to the chip's launch in April 2003. "You ain't seen nothing yet."

"Opteron is on track to achieve 10 percent of the PC server market by the end of the year and AMD could take up to 30 percent of that market over time," Richard said.

"I'm very excited about what (the first quarter) is going to look like," Richard said. "What's changed dramatically is that now we're standing alone with our own technology. I think we've got a serious chance of making an inroad and keeping it."

Market acceptance of Opteron has been strong. Sun has a broad lineup of servers that use Opteron, and Hewlett-Packard Co. earlier this year announced its intent to use the chip.

Richard said a 30 percent share within about the next two years in the market for servers using Intel and AMD-compatible chips was achievable. "I see no reason why we couldn't capture a third of the server market," Richard said, adding that AMD will end 2005 as "a significant player in the enterprise segment."

Sunnyvale, California-based AMD last month posted a third-quarter profit after a year-ago loss and predicted sales would rise more than 10 percent in the current fourth quarter because of improving demand for its processors used in PCs.

The company said it expected sales to be "driven by processor sales that exceed seasonal trends" in the fourth quarter, historically the strongest quarter for PC sales, marked by winter holiday shopping for gadgets and computers.

Until 18 months ago, AMD did not have a processor aimed squarely at the corporate computing market, where powerful computer servers function as the workhorses of networks and company data centers.

"As we bring to market our dual-core (chip), that's going to have a leveraged effect, I expect that a much larger product portfolio in Q1 -- followed in the summer by dual-core offerings -- will really take Opteron to the next level." said Richard.

Market research firm IDC has predicted AMD will exit 2004 with 10 percent of the market for Intel and AMD-compatible, or x86, computer servers.

"If we can, after the first year and a half, exit the year with a 10 percent run-rate, then in 2005 we can build on that," he added.