AMD's four-core, 45 nm Shanghai processor is shipping now, ahead of schedule. The chip, which AMD has not yet formally announced, will be priced aggressively and is getting performance measures as high as 35 percent above its previous 65 nm Barcelona while consuming as much as 30 percent less power, said Burke Banda, a server marketing manager for AMD.

The Barcelona chip was marred by late delivery due to a verification glitch at a time when archrival Intel was rolling out its widely praised Penryn family of multicore processors. That cost AMD significant business in the server sector where it has had an edge for several years, but with Shanghai the company has regained its footing.

"I can see the AMD percentage of our sales increasing dramatically with Shanghai," said Philip Pokorny, chief hardware architect for Penguin Computing (Fremont, Calif.) an integrator focused on the HPC market. "Before Barcelona our business was 70 percent AMD processors and 30 percent Intel, but there was a reversal and now I am hoping we get to parity," he said, speaking at a panel of integrators gathered here by AMD.

"We were heavily skewed to AMD processors in 75 percent of our business since 2004, but [with AMD's Barcelona slip] Intel has made some recent inroads," said John Lee, vice president of advanced technology solutions at Appro International Inc. (Milpitas, Calif.), an integrator with customers including top supercomputing labs. "Our users are testing Shanghai now and seeing significant performance increases, and Shanghai will be everywhere from general purpose workstations to supercomputing solutions," he added.

But AMD's current edge over Intel in server CPUs will be short lived. Late next year Intel is expected to roll out an eight-core server CPU as part of its 45 nm Nehalem family that matches the AMD architecture of using integrated memory controllers and high-speed interconnects.

Intel already ships a six-core server CPU, called Dunnington, part of its existing 65 nm Penryn family. For its part, AMD said in May it will roll out its Istanbul six-core server CPU late in 2009, and a twelve-core version in 2010 using two Istanbul dice in a multichip package.

Overall, the competition in the server CPU space is cyclical with Intel and AMD trading off leadership, said Pokorny. "I expect it to be neck-and-neck," he said.

"It's a horse race, and we see a very competitive environment going forward," added Lee.