Los Angeles  - Chip manufacturer AMD aims to challenge rival Intel by launching its Shanghai processor by the end of the year.

The company has learned its lesson and there won't be any of the start-up problems of the kind that afflicted the company's latest Barcelona processor, AMD manager Pat Patla told the CNET media company.

AMD, the world's second biggest chipmaker after Intel, lately suffered billion dollar losses and replaced its top management.

Barcelona was aimed at finally catching up with main rival Intel in the server market, but after numerous technical problems it was launched eight months behind schedule.

"Originally the plan was that Shanghai would launch in the first quarter 2009 and we were able to pull that into the fourth quarter of this year," Patla said.

Quad-core chip Shanghai is designed for use on servers. A PC version called Deneb is scheduled for the first quarter of
2009.

"We're in full production right now in the factory," Patla said, adding that "people will start getting first silicon from the final production very shortly."

According to the CNET report, Shanghai will out-perform its predecessor Barcelona by 20 per cent. It is the first AMD product manufactured in 45-nanometer technology, which Intel has already been using for some time. This allows more items to be produced in one production run.

The competition in the lucrative server market will remain tight. Only two weeks ago, Intel presented its Xeon 7400, a server processor with six cores, which is soon to be delivered to clients like Dell, HP, IBM and Sun Microsystems.

The more cores that can be fitted onto a piece of silicon, the more calculations a computer is theoretically able to process simultaneously.

According to AMD's Patla, the company is planning its first six- core chip for the fourth quarter next year. (dpa)