The computer chip arena seems set for the next battle royal between Intel and Advanced Micro Devices (AMD), with the latter unveiling ambitious plans for the near future saying it would release its first six-core chip next year and a 12-core processor on a new platform in the first half of 2010.

However, company officials refused to comment on speculation that AMD could spin off its manufacturing arm as part of a new fab-lite strategy, while keeping its design group, essentially splitting the company in two.

Also, it is determined to move its chips to 45-nanometer (nm) manufacturing by the end of 2008. This takes the fight directly to market leader Intel who had been producing chips with 45 nm circuits since October. The number refers to the size of transistors on a chip.

The smaller the size, the more transistors that can be packed on a single die, boosting overall performance at the same or lower power consumption. Also, the central processing unit (CPU) and the graphical processing unit (GPU) can be combined on a single piece of silicon, a feature that AMD calls accelerated processing unit (APU).

Intel is due to release its own next-generation processor, code-named Nehalem, in the second half of 2008, as well as a processor with 6-cores during that time. With Nehalem, Intel plans to erase several advantages AMD has with its quad-core Opteron processor. These improvements from Intel will include a new high-speed chip-to-chip interconnect and an integrated memory controller.

In the product road map released 7  May, AMD indicated that it is planning to release the 45-nm "Shanghai" processor, which will contain four processing cores, sometime in the later part of 2008, although the chipmaker is not offering a specific release date at this point. This processor will contain 6MB of Level 3 cache compared with the 2MB of L3 cache in the company's current crop of quad-core Opteron processors.

Shanghai delivers 25 per cent better performance than the company's current 65-nm quad-core Opteron, formerly known as Barcelona, while consuming 20 per cent less power during idle time. Shanghai also will ship under the Opteron brand.

This particular road map addresses AMD's chips for dual-socket and multi-socket servers and workstations. The company did not offer updates on its PC or single-socket server plans, although a 45-nm desktop processor, "Deneb," is slated for release in 2008.

Next year, it plans to release another 45-nm processor, "Istanbul," which will contain six processing cores. However, this is meant for server workstations. In 2010, the company's plans include two additional processors, which will take advantage of new chip sets and newer DDR3 (double data rate 3) memory. The first, called "Magny-Cours," will use 12 processing cores, and the second, "Sao Paulo," will have six cores.

Both will use version 3 of the HyperTransport technology, which will deliver a four times performance boost in bidirectional data movement. Additionally, the company will migrate to its next-generation platform, codenamed Maranello, as using new chipsets, the AMD RD890S, the RD870S, or the SB700S.

AMD server and workstation manager Randy Allen said the company's existing server processor, Barcelona, has commitments to be used by all the top server makers including Dell and Hewlett-Packard, following delays in availability because of a defect, and that demand and supply for the chip would reach a balanced level towards the end of the current quarter. Sun Microsystems, IBM and Fujitsu Siemens Computers are expected to announce their intentions to use this product as well.

One reason Barcelona's problems initially went undetected was that AMD did not provide samples to system vendors earlier in the production process. This meant that design flaws in the silicon went unreported until later in the year. In its effort to correct the mistakes of 2007, the company has already begun shipping samples of Shanghai to its OEM partners for testing and validation, according to Allen.

AMD has been falling behind Intel since 2006, after a few years of market gains that started with the release of its Opteron server processor. Last month, AMD reported its sixth consecutive quarterly loss, but executives held to their forecast of breaking even by the end of the year.

Also, Intel has announced plans to cram in even more transistors on its chips by moving to 32-nm manufacturing. As the two companies battle for supremacy, the customers couldn't ask for more.