In a year when IT spending improved, but didn't even come close to the frenzied boom levels driven by the Y2K crisis a few years ago, processor vendors regrouped.

Sun Microsystems' new CTO declared the death of the microprocessor by 2010, and Intel launched only one new speed grade for its P4.

But one processor vendor broke away from the pack, introducing a 64-bit processor for the x86 platform.

"The biggest milestone of the year was AMD 64 bit," said Kevin Krewell, senior analyst at In-Stat/MDR*. "The AMD 64-bit chip has gotten good reviews, and it's been picked up by Sun, a solid tier-1 server provider."

Some other analysts have questioned whether the 64-bit processor could bring in the kind of significant revenues that is expected of a new product and needed by AMD. Lehman Brothers' Dan Niles said that the new processor lacks software support, and although several PC  vendors have pledged to include the devices in their machines, they did not join AMD on stage for the launch.

"Though large PC OEMs such as HP, Fujitsu and Fujitsu-Siemens will be producing products by Q4, they were noticeably missing from the stage," he said in his report following the launch. AMD CEO Hector Ruiz claimed that many vendors feared retribution from Intel if they showed public support for Athlon 64 at the product launch

The Sunnyvale, Calif.-based AMD launched its Opteron 64-bit server processor in April and brought the same technology down to the desktop in September with its Athlon 64-bit processor.

AMD followed IBM and Apple at 64-bit this year. Apple announced in June that it would rely on IBM architecture for its 64-bit processor.

That has left Intel as the odd man out, with only its Itanium product at 64-bit.  Industry observers have speculated that Intel is working on 64-bit functionality and it may indeed already be included in some products under development right now.

But Intel's overall strategy is to hold back on introducing that technology for the masses for as long as possible because it doesn't want it to compete with its own Itanium processor, said Krewell.

"Itanium is building slowly," he said. Intel is looking for more vendors to build software for the high-end server processor before introducing its new architecture, according to Krewell.

"I expect that will take a long time," he said. "Maybe even until 2005."  Intel will hold out as long as possible to introduce 64-bit for the desktop, until competition  from other vendors such as AMD and Apple force it to introduce its own product to tap that market.

Microsoft is working on its 64-bit version of the Windows operating system. The product had been scheduled for release in Q1 of 2004.

"We really expect that in mid-2004," said Krewell. "And once that gains traction, then Dell and Intel will be forced to move."

At the Intel Developers Conference this fall, CTO Patrick Gelsinger told reporters that 64-bit technology at the desktop would not be needed for "several more years." Intel officials said that operating systems and software were not yet ready for the technology.

However, at its Athlon launch the week after the Intel Developer Forum, several companies pledged support for the 64-bit desktop platform, including Epic Games with demonstrated its Unreal Tournament 64-bit version at a recent Comdex. AMD has also noted that several versions of the operating system Linux are already available at 64-bit.

Intel itself was surprisingly quiet this year, said Krewell. "This was one of the oddest years in covering Intel," he said. "The company usually launches three or four speed grades over the course of a year. But Intel hardly launched anything at all - just one new speed grade for Pentium 4 in 2004."

In addition, the semiconductor giant saw shipments of its 90nm processor, code-named Prescott, slip from Q4 of this year into next year, although the company is recording revenue this calendar year for those shipments.

Despite the challenges, it was still a very profitable year for the company. Intel put its focus on launching its new mobile line of processors, Centrino. Intel has been behind the curve with its mobile technology, with late introductions of support for new 802.11 standards.  However, Intel has put a heavy focus on its Centrino branding, not a surprise from the semiconductor company that was the first turn a processor into a consumer brand with its Intel Inside campaign.

Processor upstart Transmeta Corp. sought to pull itself from the depths this year. As its Crusoe chip aged to become more of an entry in the embedded space, the tiny company felt the spotlight as it launched its second-generation chip, Efficeon.

The launch came just in time. A day later, Transmeta announced a Q3 revenue drop of 47 percent year-over-year. And while the Efficeon chip has not yet shipped, it does look promising, Krewell said. The future of the company is riding on its success.

"I'm very optimistic about Efficeon," he said. "We will probably see products in Q1, and I am expecting them to have a big coming out at the Consumer Electronics Show in January."

Transmeta also announced LongRun2, a technology the company claims will reduce the leakage problem that has become more troubling as companies have scaled down to smaller geometries. Transmeta is looking to license the technology to other companies in search of a solution to leakage.

"LongRun2 recognizes that the process guys alone can't fix the whole leakage problem," said Krewell. "The process guys and the designers need to work together to resolve this issue going forward."

Krewell noted that other companies have indicated that they are very much interested in licensing the technology from Transmeta once it verifies it with TSMC.

"The technology, looks good, but we are still waiting for the beef," he said.

By: DocMemory
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