Sun Microsystems and Advanced Micro Devices engineers are on track with the two companies' server transition to the Barcelona chip, AMD's quad-core Opteron processor, says Phil Hughes, a spokesman for AMD.
Hughes adds that it too early to see what impact Sun's choice of Intel for some servers will have on the company. UBS analyst Uche Orji says AMD could take a hit--each $100 million in lost Sun sales is a 5 to 10 cents a share hit to earnings.
"Sun remains a valuable customers," says Hughes. "We're collaborating on future roadmaps and still ramping up Opteron. We're also engineering a transition to Barcelona for mid-2007 and have production samples in partners' hands."
Bottom line: Sun's partnership in servers doesn't necessarily mean Intel wins at AMD's expense. For instance, Sun could pitch AMD for high-performance computing while still offering Intel in complementary systems downstream. "We can't say how Sun will position this with customers," says Hughes. "AMD has been a long-time advocate for choice and we recognize that Sun wants to offer choice as well."
John Fowler, who heads up Sun's hardware group, made similar comments. "Certain products will be similar [between Intel and AMD systems from Sun], such as DP rack servers, but others will be different. AMD is clearly better for high performance computing. We'll make it clear which is best for which kind of project," Fowler told Dan Farber.
As for the market share wars, don't expect the needle to move dramatically in Intel's favor with the Sun deal. Dean McCarron, principal of Mercury Research, a research firm, says AMD could lose all of its server business and its total market share would fall by a point or two. However, server revenue is significant for AMD.
"This (Sun and Intel partnership) isn't a catastrophe, but it does elicit some concern," says McCarron.