Much like its battle against NVIDIA during the Radeon 4000/5000 series era, AMD is gaining ground on its much larger competitor Intel.  Both companies launched CPU+GPU chips.  Intel attacked the high end, launching the powerful, yet pricey Sandy Bridge processor.  Meanwhile AMD attacked the low-end with the budget-friendly Brazos (E-Series) CPUs, which actually manage to beat Sandy Bridge in GPU performance.  And as Charlie Sheen would say, AMD is "winning" early in the race.

Looking to punish Intel, the company today announced [press release] that production units of its next Fusion core, Llano, were shipping to OEMs.  Llano will be officially branded as A-series (A4, A6, A8) and E2-series processors.

I. What's Inside?

The A/E2-series core is built on a 32 nm process, versus the 40 nm process used with the E-series (Brazos).  That means that the A/E2-series should offer better performance-per-watt.

The GPU is significantly more powerful than that found in the E-series.  The A/E2-series uses the same design -- Evergreen -- but packs at least twice the core count.  The E-series had 80 Radeon cores, the A/E2-series packs between 160 and 400 Radeon cores.  AMD expects the performance to be in line with the budget Radeon HD 63xx card in the cheapest chips to a mid-range Radeon HD 65xx card on the high end. 

The actual CPU core design is a bit of a stopgap.  It packs the reliable K10 core -- essentially a Phenom II core (though it may be clocked lower).  While Brazos used a new core (the lightweight Bobcat design), Llano recycles a 2-year old design (the Phenom II revision of K10).  

It will be eventually phased out and replaced by a design called Trinity, which will drop in AMD's powerful upcoming Bulldozer core in the place of K10.  Trinity is expected to land in the first half of next year (likely in the early summer).

Due to the older core design and greater processing power, the wattage is bumped significantly from Brazos, despite the die shrink.  The A/E2-series systems-on-a-chip are expected to suck up anywhere from 25 to 100 watts, versus approximately 18 watts for the E-series.  Most of the chips draw about 65 watts.

For that reason, while you may seem some A/E2-series chips in the laptop market, AMD will be primarily pushing Llano in the budget desktop market, which is still quite large.

The core does remedy its CPU's power thirst slightly by packing one significant improvement over past Phenom II-type designs -- it introduces discrete power gating.  This should help to dramatically reduce power consumption during periods of light use by completely shutting off voltage to inactive cores.

II. Outlook

Llano is shipping now to OEMs.  It will officially launch later in Q2 (presumably with partner product announcements).  Commercial products will ship by Q3 2011, at the latest (in time for the important back-to-school and holiday shopping seasons).

AMD's rhetoric is a bit extreme:

More information about systems based on AMD A-Series APUs will be available when we launch the “Llano” APU later this quarter. However if you want a sneak peak of the brilliant HD graphics, power efficiency and supercomputing power “Llano” is expected to deliver, take a look at this video.

Don't delude yourself -- Llano doesn't offer you true "supercomputer" power, unless you're talking about a "supercomputer" that's time-traveled from the late 80s.

What it does offer is what could be a great deal for consumers.  Most budget PC shoppers don't expect much graphically.  Here they will be getting essentially a full-fledged graphics card at a fraction of the price they'd pay for two discrete components.

Intel does not have a chip that currently fills this position.  Sandy Bridge, for all its awesome CPU-side performance, will likely be much more expensive than Llano.  And ultimately it will almost certainly be put to shame by Llano's GPU-side performance.

In short, Intel may be in a bad position here, in that it essentially does not have a competitive offering for budget PCs (yet).  

An important test, though, will be how quickly OEMs warm to the idea of Llano in their desktops.  OEM support has long been a problem for AMD (partly due to anti-competitive past tactics from Intel).  But given the recent success of the Radeon HD 6000 series on the desktop side and increasing pickup of Brazos by the top players like HP and Dell, we'd guess Llano should be pretty well received.

AMD's win boils down to two factors:

1.  In the budget market, price trumps all.

2.  In budget machines the iGPU is typically much more anemic than the CPU, thus a stronger GPU trumps a stronger CPU.

If AMD can deliver on the promise of Trinity, it should be in an even peachier position.  Llano is no modern supercomputer, but it does promise to be a great deal for budget shoppers.