Santa Clara (CA) – While AMD is currently planning to ramp its 45 nm production in the first half of this year, and volume launch 45 nm processors for the second half, Intel is already ramping down 65 nm quickly, popping out 45 nm processors at a rate of 100,000 per day.

It may be much more difficult for AMD to catch up with Intel than previously anticipated. Intel is plugging away at an astonishing rate, its engines appear to be working flawlessly at this time, at least from what we can see. At yesterday’s analyst meeting, chief executive Paul Otellini said that Intel has shipped more than four million 45 nm processors so far since their launch late last year.

According to the executive, 72 different 45 nm models are currently shipping and the firm’s four fabs in Oregon, Arizona, New Mexico and Israel are churning out 100,000 processors each day. By the end of the first quarter, roughly 75% of Intel’s processor output will be based on 65 nm and 25% on 45 nm. Sometime in the third quarter, Intel expects to reach the crossover and produce more 45 nm chips than 65 nm units.

It isn’t a secret that Intel is heavily investing into its production technology with the goal of keeping and extending its leadership in this area. Otellini provided some insight into the financials and just how much it cost Intel to arrive at 45 nm at the time it did. The executive estimated the development investment at about $1 billion, product development (Penryn, Nehalem, Silverthorne) at about $2 billion and manufacturing facilities at about $9 billion. Add everything up and you have $12 billion at the bottom line.

It is a massive investment, and virtually impossible to match by companies such as AMD, but Intel expects something in return, of course: Otellini said that the $12 billion 45 nm investment will yield about $80 billion in revenues over time.

The next 45 nm processor, based on a completely new micro-architecture, is on track for a H2 2008 delivery. Nehalem will arrive with 2, 4 and 8 cores, an integrated 3-channel DDR3 memory controller, Hyperthreading support (up to 16 threads per CPU) and what Otellini called a “very flexible design”. Sometime in 2009, he expects that Intel will have the capability to integrate non-CPU cores into Nehalem, but general purpose cores such as graphics as well. Yes, that would be AMD’s Fusion concept in an Intel processor.

Graphics will play an increasingly important role at Intel and its platform strategy. The company has begun its production efforts and will bring its graphics technology down 45 nm until 2009. By 2010 and 32 nm, CPU and graphics chip production will be “completely synced” Otellini said. The company is also moving from a “good enough graphics” approach to the higher end, competing with Nvidia and AMD for the crown of the segment. Of course, that product that company hopes will achieve this goal will be Larrabee, a multi-purpose “programmable Intel architecture machine” for application areas ranging from high-performance computing to discrete graphics.

According to Otellini, Larrabee will have “lots of cores”, “lots of threads” and represent Intel’s first “many-core” product”.

Like Nvidia’s Tesla cards and AMD’s stream processor Firestream cards, Larrabee is expected to focus on visualization applications with supercomputer-like processing capabilities in floating point operations. Other than Tesla and Firestream however, Intel promises that Larrabee will have greater memory bandwidth and will also be easier to program, as it is based on regular IA architecture. Larrabee is slate for a late 2009 or early 2010 release.

Meanwhile, Intel noted that 32 nm is also on track for a H2 2009 introduction. The technology will debut with Westmere, a 32 nm refresh of Nehalem. Sandy Bridge, a new 32 nm micro-architecture is already under development - just like its 22 nm refresh, which has not received a public name yet.

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