The story sounds familiar: Intel hits a new milestone in nanometer architecture, and AMD waits a while to follow up. It happened with 65nm processors, and it's happening again now. Two days shy of a year since Intel launched Penryn, its first 45nm chip, AMD is finally ready to counter with a few 45nm CPUs of its own--Phenom II has finally arrived. But based on our hands-on testing of two Phenom II machines--the Dell XPS 625 and the Maingear Dash--the chip isn't quite as dominating as AMD would have you believe.

AMD Phenom II Explained

AMD is positioning Phenom II in between Intel's Core 2 Quad and Core i7 offerings. Phenom II chips are available in two versions, the X4 920 and the X4 940 Black Edition, which compete tit-for-tat against Intel's highest Core 2 Quad CPU frequencies at 2.8 and 3.0 GHz, respectively.

AMD bumped the shared L3 cache of the Phenom II processors up from 2MB to 6MB, giving each CPU a total cache of 8MB. L3 cache serves as a shared memory space for the cores to draw from. Increasing the amount improves the CPU's ability to pull data from this faster memory space instead of having to issue slower requests to the system's main memory. The move puts Phenom II processors right in the middle of Intel's Core 2 Quad lineup for cache size, but the result is still short of the 12MB caches found on higher-end Core i7 chips.

Though limited overclocking of the 920-edition processors is available through AMD's OverDrive software, the company is tipping its hat toward the extreme-performance crowd with its Black Edition processors. These CPUs run multiplier-unlocked, which liquid-nitrogen-armed enthusiasts have been able to exploit to frequencies above 6 GHz, surpassing the world record for Intel Core i7 processors, which stands at 5.5 GHz.

Performance

The Phenom II's integrated memory controller and HyperTransport interface give it a technical edge over competing Core 2 Quad chips, which lack those features. Intel moved to an integrated memory controller and began incorporating its own version of HyperTransport--dubbed QuickPath Interconnect--only with its Core i7 platform. The integrated memory controller and HyperTransport interface allow Phenom II processors to achieve a higher memory bandwidth than Core 2 Quad processors can, by eliminating the bottlenecks created by a frontside bus and an external controller. The arrangement, in theory, improves system performance.

But not in practice, apparently. In comprehensive PC World lab testing of two $1499 Phenom II-based desktops, Dell's XPS 625 and Maingear's Dash, these brand-new chips failed to blow Intel's Core 2 Quad and Core i7 offerings out of the water.

The Phenom II systems crushed most of our top-ranked sub-$1500 value PCs, but that's to be expected, as they have twice the cores and are generally almost twice the price of predominantly Core 2 Duo-based value desktops. We then went on to compare these Phenom II systems against the best that the $1500-plus machines on our Top 10 Power PCs chart had to offer, including both Core i7 and Core 2 Quad PCs with varying amounts of system memory and hard-drive RAID configurations. Neither Phenom II desktop was able to beat any of our nine best Intel-based power PCs on our WorldBench 6 tests. Even Maingear's Dash, a Phenom II desktop running an X4 940 Black Edition CPU overclocked to 3.4 GHz, wasn't up to the task. Adding insult to injury, the Phenom II systems couldn't even best the CPU benchmark scores of the Xi Mtower PCIe Centurion, a power PC sporting a 3.16-GHz Core 2 Duo E8500 processor.

Upgraders' and Overclockers' Dream?

That said, AMD is waging its war against the speedier Core i7 chips on price, not performance--especially for potential upgraders. Moving from a Core 2 Quad CPU to a Core i7 chip requires a obtaining a new motherboard and new memory, in addition to the processor. Moving from a Socket AM2+ processor to a Phenom II requires buying only the new processor. And if you decide to upgrade to an AM3-socket Phenom II CPU, expected to be released in early 2009, you'll be able to keep your DDR2 memory--possibly even your motherboard. But from what we've seen so far, the price benefit isn't as drastic if you're in the market for a new computer: The two Phenom II systems we tested each rang up at $1499; three of our higher-performing power PCs (including both Core i7 and Core 2 Quad models) cost from $1600 to $1800.

AMD is launching its next-generation platform alongside the Phenom II processors. The successor to the company's Phenom quad-core-based Spider platform, the new Dragon platform consists of AMD's Phenom II processors, 4800-series Radeon HD graphics cards, and 790-series motherboard chip sets. The platform focuses on energy savings, thanks to a combination of AMD's Cool'n'Quiet 3.0 software and 45nm architecture. Together, they allow Phenom II processors to reduce their heavy-load power consumption by a reported 30 to 40 percent versus Phenom processors, with a savings of up to 50 percent at idle.

Considering that AMD had a full year to ponder Intel's Core 2 Quad and Core i7 chips, it isn't exploding out of the gate. Core i7 remains the high-end processor to beat for average consumers. Judging from our testing, a Phenom II will require a solid system backed by strong overclocking to surpass the prowess of even a midrange or high-end Core 2 Quad processor. If you're looking to upgrade and you care more about simplicity than you do about high stock clock speeds, AMD's single-CPU upgrade is a powerful statement. As for performance, perhaps AMD's products will seem more appealing once extreme-system manufacturers start pushing their Phenom II chip sets past the 4-GHz range. We'll hold our breath to see how everything pans out.