AMD has launched its latest quad-core Opteron processor, codenamed Shanghai, as the chip maker looks to rebuild customer confidence following problems with its Barcelona chip earlier this year.

Barcelona was the quad-core Opteron processor that AMD started shipping in volume in April. Announced in 2006, mass shipments of Barcelona were delayed after bugs were detected in the cache memory. Some customers turned to quad-core processors from Intel in the interim.

The delay cost AMD market share and credibility, and it must now build back up its reputation as a reliable chip supplier. Some customers may still be a little wary, said Rob Lineback, senior market analyst with IC Insights.

"There's going to be a degree of caution wanting to make sure [Shanghai] does everything it has promised to do," Lineback said. It could be another few months until customers adopt Shanghai, he said.

The down economy and slowing server shipments could also go against AMD's momentum, said Jack Gold, principal analyst at J. Gold Associates. "This is not the most opportune time to launch a chip," Gold said.

AMD says the problems are all behind it. It hardened the testing process for Shanghai to avoid the bumps that Barcelona faced, said Pat Patla, vice president and general manager of AMD's server and workstation division. Server vendors were brought into the chip-testing process early, and validation has gone smoothly, which helped AMD avoid the problems that dogged Barcelona, he said.

Running at 75 watts, the Shanghai processors range in speed from 2.3GHz to 2.7GHz. The chip also includes improved hyperthreading for faster application performance.

Manufactured using the 45-nanometer process, Shanghai chips are more power-efficient than Barcelona, which were manufactured using the 65-nanometer process. New CPU (central processing units) designs allow Shanghai to turn off unused functions or shift processing duties to save power. It also provides more power savings when servers are idle compared to earlier processors.

Shanghai is being aggressively priced for vendors to quickly adopt the chip, Patla said. The chips are 20 percent faster than Barcelona and can be easily plugged into the same socket that supports Barcelona chips now.

"It's relatively easy for a server maker to put Shanghai in and get that extra... gain in performance [over Barcelona]," Lineback said.

Shanghai-based systems are expected to be immediately available, Patla said. Vendors including Sun, Hewlett-Packard, IBM, Dell and Verari Systems are expected to launch servers with the quad-core chip.

Pricing for the Opteron 2000 series chips start at $377 (£254) for the 2.3GHz Opteron 2376, running to $989 for the 2.7GHz Opteron 2384. Prices for the Opteron 8000 series begin at $1,165 for 2.3GHz Opteron 8378, up to $2,149 for Opteron 8384, which runs at 2.7GHz.

The chip's launch comes just a few days before Intel launches its next-generation Nehalem chip. Like Shanghai, Nehalem integrates the memory controller into the CPU. However, Shanghai for now will not compete with Nehalem since the two chips are aimed at different systems. Shanghai is targeted at servers, while Nehalem is for high-end desktops.

AMD will follow Shanghai with Istanbul, a six-core processor in 2009, followed by the twelve-core Magny-Cours in 2010.