AMD's Processor Pas de Deux

"We've got a lot of great engineers, and they haven't been sleeping for the past two years," said CEO Dirk Meyer.

Though the company has until now made modifications to the same chip design for servers, desktops and laptop computers, executives said that AMD is now running parallel engineering efforts to develop specialized chips for each product category.

Among the first fruits of this approach is a new dual-core mobile processor slated for release in mid-2007. According to AMD, the processor will incorporate several features that will provide laptops with longer battery life, such as the ability to switch-off one of the processor's cores as well as the ability to isolate power consumption between the microprocessor and other components on the computer's motherboard.

AMD will also introduce a new quad-core processor for servers, workstations and high-end desktops in mid-2007.

Both new processors will be built with 65-nanometer circuits, as the company moves ahead with efforts to convert its manufacturing facilities from the 90-nanometer-capable equipment with which the company makes chips.

AMD lags Intel, which already manufactures chips with 65-nanometer circuitry, which allows for the squeezing of more transistors onto an individual chip, increasing performance and functionality.

Executives at AMD said the company would begin volume production of 65-nanometer chips by the fourth quarter of this year and move to volume production of more advanced, 45-nanometer chips in mid-2008.

Earlier this week, AMD announced a plan to spend $2.5 billion over the next three years to expand its manufacturing capacity by up to four times the 2005 level.

"We are fully positioned to service one-third of the market by '08," said Daryl Ostrander, an AMD senior vice president on Thursday.

The company also announced a move to open its platform to third parties. Dubbed Torrenza, the initiative would add a special expansion slot to a PC's motherboard to which companies could provide special application specific processors -- similar to the way separate graphics processors are incorporated into many PCs today.

AMD said the Torrenza initiative will allow PC makers to differentiate their products, and could be used to develop new applications for everything from portable gaming systems to supercomputers.

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