The Chip That Must Save AMD

Advanced Micro Devices (AMD) stock stopped trading at $2.57 yesterday, down 13%. A year ago, that price was $13.27. So today’s news — that the company is about to release a new chip named Shanghai — comes at a particularly crucial time.

The chip is supposed to be more energy-efficient and better at running “virtualization,” a software trick that allows servers to do more work — if their processors can keep up.

Customers who have tried Shanghai seem to like it. “We knew the performance results would be good, but they exceeded our expectations,” HP exec Paul Gottsegen told the Wall Stret Journal. Dell (DELL) executives say they appreciate Shanghai’s energy efficiency. Both companies will buy the chip. So will Sun (JAVA) and IBM (IBM).

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