As Intel prepares to launch its Woodcrest chip for servers in June, rival Advanced Micro Devices has purchased billboard ads that claim its Opteron chip will reduce electricity costs in data centers.

AMD posted a "ticker" display Tuesday on billboards in Times Square in New York City and along Route 101 in California's Silicon Valley.

The display shows a theoretical electric bill representing the worldwide cost incurred by companies running servers with Intel's Xeon chips instead of AMD's Opteron chips, said Brent Kerby, AMD's product marketing manager for Opteron.

Then on Wednesday, Sun launched an effort to taunt competitors HP and IBM for using fans to cool their servers, instead of using more efficient chips such as Sun's UltraSPARC T1.

Many chip manufacturers compete today based on power efficiency instead of pure speed, boasting of high performance-per-watt.

Some of those companies are working together to share information about power efficient processing, through an industry group called The Green Grid. Founded in April by AMD, Egenera, HP, IBM, Rackable Systems and Sun, the group offers a forum for data center managers to share techniques for reducing power and cooling costs. On Wednesday, three more companies joined the effort: Advanced Power and Cooling (APC), Dell and VMware.

By some measures, the strategy is effective.

AMD says market results back up these claims, as Intel lost market share with its Xeon chip for servers, reporting first quarter net income of $1.3 billion, a 38% decline over the year-earlier period.

At the same time, AMD said its Opteron chip for servers gained market share in the worldwide demand for x86 server processors, rising from 16.4% in the fourth quarter of 2005 to 22.1% in the first quarter of 2006.

The Woodcrest chip will make up the difference, using a new Core microarchitecture and 65-nanometer, dual-core design to improve on Xeon's performance, said Intel CEO Paul Otellini in his remarks at the company's spring analyst forum last Thursday.

Customers are also beginning to pay attention, analysts say.

"Power and cooling concerns are a major point in the industry right now, with the increased power of chips and increased server density, with blades and high-density computing," said Jed Scaramella, an analyst with IDC. "Power is mounting, and cooling becomes an important factor. Customers are starting to look at this."

The IDG News Service is a Network World affiliate.