AMD’s situation in the processor market these days can hardly be called enviable. AMD fans pinned a lot of hopes upon new K10 micro-architecture, however in reality it didn’t help the company create worthy rivals to Intel’s solutions, even though this micro-architecture is indeed innovative and efficient. Evident strengths of this micro-architecture, such as native quad-core design and L3 cache shared between all cores, remained in the shade because of technological issues that prevented AMD from getting to produce processors with frequencies beyond 2.5GHz. As a result, quad-ore Phenom X4 processors that are already available today turn out unable to compete not only against new 45nm Penryn CPUs, but also against the old 65nm Intel processors.
Moreover, the performance gap between Phenom X4 and Core 2 Quad is so dramatic that even the possibility of performance parity between the two is pretty vague. It is evident that 65nm production technology currently used by AMD will not allow them to increase significantly the working frequencies of their Phenom processors. As for the transition to a more advanced 45nm production process, it is scheduled to take place in Q4 2008. However, 45nm Deneb processors that should come to replace 65nm Phenom will be able to hit only 3.0-3.2GHz frequencies right from the start. And it seems to be not enough to successfully compete against the top quad-core Intel CPUs, so AMD will have to put up with the fate of an inexpensive processor supplier for another while.
AMD does understand the situation very well and tries to introduce the platform concept that will help promote not just bare CPUs but complete kits including a processor, a mainboard and a graphics card. This approach may allow the GPU to make up for insufficient processor performance, which AMD marketing people are trying to stress. However, these kits may be of interest primarily to OEMs and system integrators rather than end users, who are used to putting their systems together from individual components selected basing on their own specific preferences. That is why it is not surprising that neither AMD Spider platform with discrete ATI Radeon HD graphics, nor Cartwheel with the integrated AMD 780G chipset caused any significant stir among computer enthusiasts.
In this situation AMD has to look for other ways to win consumers’ hearts. Their main strategy in attaining this goal has become aggressive pricing policy. Together with the launch of Phenom X4 9X50 processors using the new core revision free from the “TLB bug”, they also lowered the prices of their quad-core processors proportionally to their performance in reference to that of the competitor solutions. As a result, AMD is currently offering the most affordable quad-core solutions in the market. That will certainly find their way into some users’ systems with strategic positioning like that. The same things are happening to the dual-core Athlon 64 X2 processor family that loses to contemporary Core 2 Duo processors in every test. Therefore, retail prices of Athlon 64 X2 dropped so greatly that now these CPUs are regarded only as budget solutions.
Price drop is a good way to maintain proper sales volumes. However, in this case the forefront of the computer community loses interest to AMD solutions and the company is no longer regarded as a technology leader. So, AMD had to find another unique way of warming the public up to their processors. And today’s announcement of the unique Phenom X3 processor family with triple-core configuration is exactly a measure like that. Of course, one of the reasons for these processors to appear is direct economical benefit for the manufacturer, as they got the opportunity to use up “defective” dies for quad-core Phenom processors by disabling one of the cores. But on the other hand, the launch of Phenom X3 may also be regarded as another attempt to compete with Core 2 Duo that are superior to dual-core Athlon 64 X2 from all standpoints. Triple-core Phenom processors are positioned as intermediate solutions between Athlon 64 X2 and Phenom X4, and their price will make them direct competitors to Intel’s mainstream dual-core processors.
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