Advanced Micro Devices (NYSE: AMD)launched its highly publicized server processor on Monday, hoping its new chip, featuring four cores, can help it regain ground lost to larger rival, Intel Corp (NASDAQ: INTC).

Sunnyvale, Calif.-based AMD upgraded its Opteron line of processors with technology know as quad-core, allowing a single chip to effectively do the work of four. The processor, which was dubbed Barcelona during development, is a component of powerful servers used by data centers and workstations.

The chip's arrival marks the largest upgrade to the company's lineup in years, but AMD's entry into the quad-core market comes later than competition. The chip is coming 2 months after its own scheduled release date, and nearly a year after rival Intel began releasing quad-core chips.

Intel now has nearly 20 different quad-core solutions, including processors for servers and desktops. Last week it announced 6 more versions.

The companies take different approaches to delivering multi-core performance, however. Intel's chip is actually a package of two-chips with two cores in each, while AMD places all four core's on a single piece of silicon.

Intel's approach to doing quad core is essentially focused on maximize yields and not having to do any kind of specialized design for one market, Dean McCarron, principle analyst at Mercury Research said.

While AMD's approach may lead to performance gains, especially in certain types of applications, the success of the chip may depend on the pricing, McCarron explained.

Intel's method allows them to minimize manufacturing costs. They sacrifice some theoretical performance doing that, but if you can offer performance at a at a certain price, what's going on inside doesn't matter.

Intel raised its third-quarter revenue outlook on demand for its microprocessors, now expecting revenue between $9.4 billion and $9.8 billion, up from its previous range of $9 billion to $9.6 billion.

AMD's late-arriving chip has been anticipated by some partners, however. Lucasfilm, which already uses servers that run on AMD chips, said it will upgrade its data center servers in San Francisco and Singapore with the new quad-core processors.

Shares of AMD surged on today's announcement, gaining 48 cents, or 3.83 percent to $13.09 on the New York Stock Exchange. Intel fell slightly, shedding 2 cents, or .08 percent to $25.45 by mid-day.

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