AMD presses on into server market

Microprocessor maker AMD says it is pressing on with its plans to enter the market for high-end servers and workstations, despite the loss of strategic support from HotRail, a maker of chipsets.

HotRail had been planning to launch a chipset that would have allowed PC manufacturers to build machines with six or eight AMD Athlon processors, but has decided to pull out of the chipset market in favour of networking technology.

The company this week completed a several-month-long transformation into an Internet infrastructure company with the launch of two new products: HotRail Channel, a chip for connecting other communications chips, and SkyRail Link, for connecting switches to routers.

The loss of HotRail's high-end chipset is a setback for AMD's plans for taking on Intel in the server and workstation market, where Intel remains virtually unchallenged. AMD downplayed HotRail's importance, however, pointing out that AMD is not yet ready to launch into the workstation/server market. By the time AMD is ready, other solutions will be available, the company said.

For example, AMD is readying its own two-way chipset for later this year, and manufacturers such as API are also expected to join the chipset fray. Late this year AMD will launch a chip code-named Mustang, which will be better able to take on chips such as Intel's Pentium III Xeon and the upcoming Willamette and Itanium processors.

"It won't have a great deal of impact," said AMD spokesman Richard Baker. "[HotRail was] doing the very high end, which is a fairly niche market. We're not going to go jumping with both feet into the eight-way market."

He affirmed, however, that the lucrative server and workstation market remains something of a Holy Grail to AMD, which until relatively recently was stuck making chips for "budget PCs". "Obviously multiway is important strategically," Baker said.

The only manufacturers currently making chipsets -- chips allowing the processor to communicate with the other parts of the PC -- for Athlon, are AMD itself and Via Technologies of Taiwan. AMD has said "several" other chipset makers are planning to launch Athlon-compatible products this year, however.

Chipset support will be crucial on the consumer side of things in a period when AMD is planning to launch four new processors, including the Duron value part. (See CPU Roadmap: AMD vs. Intel.)

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