AMD Shanghai internal memo leaked

We are on the cusp of another big moment at AMD: the launch of our 45nm server processor codenamed “Shanghai”. “Shanghai” will be the industry's price/performance-per-watt leader for x86 servers, with dominant performance in workloads that matter: virtualization, web serving, and database.

In our Q308 earnings call, Dirk noted that "Shanghai" is now shipping to customers and that we will "have the best server platform in the business." Dirk’s statement is based on extensive AMD testing and the testing and validation process of our customers and technology partners. We believe that we’ll have a significant time to market advantage before our competitor ships anything resembling "Shanghai" performance in volume for 2P servers. And even more of an advantage for 4P servers.

Here’s a “Shanghai” status check:

"Shanghai" is surpassing our expectations and, more importantly, the expectations of our customers’ and technology partners’. While we always planned to begin production of "Shanghai" in Q4 of this year, our plan was to launch in Q109 to ensure our customers and technology partners were fully ready. Thanks to the great work of the design and manufacturing teams, we pulled in our schedule and our partners are well on their way to completing validation to ensure systems ship here in Q4. This is almost unheard of in the server business. Raghuram Tupuri and his design team have officially helped put us back on path to flawless execution and developed an evolutionary product with revolutionary performance characteristics.

The technology and manufacturing team have done incredible work in bringing up 45nm silicon. In fact, the silicon was so healthy and the process so mature that this is the fastest AMD Opteron™ processor that has gone from first wafer to production parts. Our leading-edge immersion lithography technology helps enable us to deliver dramatic performance and performance-per-watt gains, second only for an AMD processor to the initial transition to AMD dual-core. Our original plan of record for "Shanghai" was to launch at 2.4 GHz in the 75-watt ACP thermal band. We have been able to significantly exceed that frequency target and the parts are drawing much less power at both full load and idle than we originally expected. We believe many industry watchers will be pleasantly surprised with what they see from AMD at launch.

When you combine all of this with the aggressive pricing "Shanghai" will offer, we like how we are positioned to go after the high-volume 2P server market in addition to further reinforcing our leadership position in the 4P and 8P market. "Shanghai" is planned to deliver enterprises unparalleled price/performance and set new performance records for the most critical and demanding server workloads. And just like AMD set the standard for power-efficiency in the datacenter starting in 2003 with the launch of the original AMD Opteron processor, we should do the same with what is driving much of the server growth today -- virtualization.

We once again have a game-changing product that will create new competitive dynamics in the x86 server business and it only gets better later in 2009 when we plan to bring to market our "Fiorano" platform featuring some new virtualization innovations and our six-core "Istanbul" processor in the second half of next year. The great work that has been done with our 45nm process and design, sets the stage for an even stronger roadmap in 2009 across all of the CSG products. These products combined with our focus on execution and aggressively reducing our expenses are what will enable us to get back to sustainable profitability.

The author C.S. Lewis once said, "We are what we believe we are." Our technology and engineering teams believed they could bring a great product to market with "Shanghai." Now we, as a company, must collectively believe that we are a clear leader in server once again if we are to help our customers and partners believe the same.

Randy