Advanced Micro Devices plans to release processors with 12 cores, which changes its product road map and kills earlier plans to release 8-core chips.

The 12-core processor, code-named Magny-Cours, will be targeted at servers and is due for release in the first half of 2010, according to the company's updated road map announced Wednesday.

The chip will include 12MB of L3 cache and support DDR3 RAM, according to the road map.

AMD is jumping from a 6-core chip code-named Istanbul, due for release in the second half of 2009, straight to a 12-core chip the following year, an AMD spokesman said.

Until last month, AMD officials repeated plans to ship the 8-core server chip, code-named Montreal, in 2009. Montreal has now been replaced by Istanbul, followed by a 12-core product in 2010, the spokesman said

Twelve-core chips will handle larger workloads better than 8-core chips and are easier to manufacture, said Randy Allen, vice president and general manager at AMD, during a conference call.

AMD is also planning to release a 6-core chip code-named Sao Paulo in 2010. The chip will include 6MB of L3 cache and support for DDR3 RAM. Sao Paulo chips could meet the need of systems that don't require 12 cores, Allen said.

The new chips will be more power efficient as they will be manufactured using the 45-nanometer process, an upgrade from the 65-nm process currently used to manufacture Barcelona.

AMD, which is struggling financially, is making financial and technical considerations in jumping from 6-core to 12-core chips, said Dean McCarron, an analyst with Mercury Research. That should allow the company to dump more cores on chips while delivering better product margins and lowering manufacturing costs.

AMD's 12-core chip will include two 6-core processors on separate chips in a single processor package, McCarron said. That is a more realistic goal than including 12 cores on a single chip, which can be expensive to manufacture, McCarron said.

The shift also allows AMD to avoid competition with Intel in 8-core chips, McCarron said. Intel is shipping a 6-core Xeon server processor, Dunnington, in the second half this year, after which it plans to jump to 8-core processors.

Even with AMD's altered road map, Intel will remain formidable. Intel shipped 78.5 percent of chips in the first quarter of 2008, while AMD held a 20.6 percent market share, a slight gain from the 18.7 percent market share it held in the first quarter of 2007.

The new product road map is a way for AMD to bounce back from recent chip and supply issues, said Gordon Haff, principal IT advisor at Illuminata.

AMD's most recent server chips, the quad-core Opteron processors code-named Barcelona, started shipping late last month after multiple delays and bugs.

"Obviously, AMD had some missteps over the past year, but they have a staple of OEMs and routes to markets with their processors. What you're seeing is much more public focus on what's going to happen in the next 18 to 24 months rather than longer term," Haff said.

AMD has had a string of recent problems. The company last month reported its sixth consecutive quarterly loss and plans to lay off 1,650 jobs by the third quarter.