I caught part of Advanced Micro Devices' Tech Day in Sunnyvale on Thursday. AMD has managed to do well with its Opteron server microprocessor by concentrating on extending the 32-bit X86 platform to 64 bits without having to jump to a new architecture, as Intel (Intel is a sponsor of SVW) did with Itanium.

And its focus on lower electric power consumption with Opteron servers was timed almost perfectly, as the price of oil skyrocketed over the past couple of years.

I keep hearing of data centers that would love to add more computing power but they cannot get any more electric power. Opteron servers are one way to pack more computing power into the same electric power grid.

Intel has made some bets that did not work out as well as it expected. The Itanium 64 microprocessor line has been a very tough road for the company, and Opteron has been a thorn in its side.

But once Intel readjusts its course and goes after a market it is very difficult to compete against its ability to crank out millions of chips from very high yields in its chip fabs. This manufacturing prowess is Intel's core strength and it can ramp up the production of large, complex chips more quickly than anyone else.

Since January 2000, AMD, under CEO Hector Ruiz, has beefed up its manufacturing and has improved its yields over the past few years. But low manufacturing yields used to plague the company for many years.

Wall Street analysts will be watching AMD like hawks to see if it can execute on its manufacturing plans and obtain high yields. With a large fixed cost asset such as a $3bn chip fab, it is imperative to obtain large numbers of working chips from each wafer, otherwise the losses can quickly mount.

The pressure is on for AMD to execute extremely well on the manufacturing side, any slip up would benefit Intel and erase any market gains.

The market gains for AMD have been significant--especially in the server market where it has about a quarter of the market. [See BusinessWeek: AMD: Chipping Away At Intel's Lead] But hanging onto those gains won't be easy as Intel makes use of its leading chip manufacturing technologies to shrink the size of its server chips, which also shrinks power consumption, and reduces prices.

AMD also spoke about thin clients/thin computing and understands that there is a trend emerging within corporations, and to some degree in the home, towards a fat server-thin client based systems where the user experience is the same as a full featured fat PC client. However, it talks about offering a family of X86 based microprocessors designed for a wide variety of thin client/thin computing applications.

The X86 architecture is unnecessary in such applications because less expensive, low-power consuming, high performance architectures are available, such as the British ARM microprocessor. There is no need to run applications locally in a thin computing environment therefore no advantage to using a general purpose X86 microprocessor. You just need something which can quickly render video and audio bits.

Intel has a special developer license for ARM that enables it to develop specialized versions. I could easily imagine a rival Intel family of chips based on multi-core ARM designs optimized for thin computing applications. This would be a more potent combination than X86 architectures similarly optimized.

It would be ironic if Intel were to pitch ARM designs against AMD's X86 based designs in the thin computing market. But stranger things have happened.

Next week I'll bring you the perspective of thin computing leader Wyse Technology and my interview with its savvy CEO John Kish. Wyse, BTW, along with its chip partner, Wyse will be launching a six-core ARM based single chip solution for thin computing applications in a couple of months. It will have graphics and audio capabilities and is designed for Flash-less systems. Wyse has demonstrated this single chip solution running 32 video streams.

A single chip solution means thin computing capabilities can be easily embedded into monitors, keyboards, cell phones - anything electronic with a network connection. And you'll get the same performance as a fully configured Windows XP desktop computer thanks to streaming technologies from Wyse, and strategic partners Citrix and VMware. More details next week...

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Dirk Meyer, president and COO presentation:

http://www.amd.com/us-en/assets/content_type/DownloadableAssets/Dirk_Meyer_6-10-05.pdf