The splurge in server sales, which Intel highlighted on Tuesday as a revival of corporate hardware spending, is also benefiting its rival AMD.

On its second-quarter earnings call on Thursday, the Silicon Valley neighbour said shipments of its new Opteron 6000 server chips nearly quadrupled compared to the first quarter “ramping late in the quarter as our largest customers transitioned the bulk of their AMD-based offering to the new platform.”

AMD seems a little behind Intel in exploiting the server “refresh”. It only completed the rollout of its Opteron 4000 series of server chips, which are specifically designed for “cloud” data centres, in late June.

“We expect to see the substantial impact of our new-generation server products to fully materialise in the third quarter,” said Dirk Meyer, chief executive.

AMD is also behind Intel in moving its processors onto silicon with smaller 32-nanometre-wide circuitry.

While Intel said on Tuesday it was accelerating production of its 32nm chips in the second half to meet expected demand for those featuring a new design, codenamed Sandy Bridge, AMD said it was having production problems with 32nm and would delay its design, codenamed Llano, by a couple of months. It will not appear until the first half of next year.

On the positive side, AMD is bringing forward its chip codenamed Ontario. Like Llano, it will achieve AMD’s cherished ambition of “Fusion”, bringing together a central processing unit (CPU) and a graphics processing unit (GPU) for the first time on a single 40nm sliver of silicon. AMD is calling this an APU (Accelerated Processing Unit).

This is AMD’s big advantage over Intel. While its bigger rival has admitted defeat with an ambitious Fusion-style combination chip, codenamed Larrabee, AMD is finally reaping benefits from its 2006 acquisition of Canadian graphics chipmaker ATI for $5.4bn.

AMD reported record GPU shipments in the second quarter with sales up 87 per cent on a year earlier. That helped it to an overall revenue increase of 40 per cent to $1.65bn for a net loss per share of 6 cents.

Ontario will combine a new processing core codenamed Bobcat with a GPU capable of running the latest DX11 graphics standard. Its low power demands and high performance will finally enable AMD to compete in categories such as netbooks and tablets, where Intel has dominated with its Atom processor.

“It’s a game-changer that significantly expands our addressable market,” said Mr Meyer.

“Based on strong customer demand and an accelerated engineering cycle, we now expect Ontario to be the first Fusion APU we bring to market.”

Ontario will ship in the fourth quarter and should show up in devices early next year, meaning AMD is likely to be facing off with Intel in the netbook and tablet zones of the Consumer Electronics Show in January.

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