AMD's new fab, new focus

If nowhere else in the world, in Dresden, Germany, all signs point to AMD. Literally. As you drive along the main drag, you see the exit for Prague, the exit for Berlin, and the exit for AMD. It's fitting, given that AMD carved out a village-size hunk of countryside for its campus - home to the skilled hands that produce every AMD64 CPU sold worldwide.

I took AMD up on its offer to attend the grand opening of Fab 36, the company's semiconductor manufacturing facility on which it broke ground just two years ago. I could have skipped the powder-dry press conference and gala that followed.

I was quite taken by the capabilities of AMD's new infrastructure. It not only churns out 100 million processors a year, it's already producing 65-nanometer AMD microprocessors. No one outside AMD will ever see these, and Fab 36's initial parts will be 90nm AMD64 processors. The switch to the 65nm process is one AMD will take when the market will benefit from it.

Shifting the focus to servers is an upending of AMD's present strategy that gives volume and client CPUs top priority in R&D and production, with servers sort of bringing up the rear. AMD is wisely putting its prestige products first, and the result will be a lowering of system prices, along with rapid advances in technology. Two short-term advantages I predict are drastic reductions in server power and cooling-related operating costs with no sacrifice in performance and eight-core servers priced within the reach of buyers for dual-processor, quad-core machines.

One strategic path that will knock you for a loop, and which I'll detail soon, is AMD's coming escape from the confines of Intel's x86 instruction set. To this point, AMD has resisted the temptation to overhaul the x86, even though it sorely needs it. When Fab 36 cranks up, AMD will overcome that fear. AMD64 processors will take on performance, scalability, resource management, and availability-related instruction set extensions that will be proprietary to AMD CPUs. Don't freak out: AMD will keep its contract to be 100 percent compatible with Intel-standard processors. But the idea of seeing "optimized for AMD64" stamped on software boxes delights me. Stay tuned.

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