Intel to Launch Upgraded Chip
Chip maker Intel Corp. plans to fill a gap in its lineup today by introducing a microprocessor for big server computers and industrial-strength desktop workstations that will compete head-to-head with the increasingly popular Opteron chip from Advanced Micro Devices Inc.
Opteron has made inroads since its introduction in April 2003 because it can process 64 bits of information at once yet also operate in the standard 32-bit mode. Vendors including IBM Corp., Hewlett-Packard Co. and Sun Microsystems Inc. soon began putting Opteron in their servers, allowing customers to continue using their huge libraries of 32-bit programs as they migrate to the 64-bit standard.
Intel had been selling one chip, Itanium, for running 64-bit applications and another, Xeon, for 32-bit programs. The Santa Clara, Calif., company recently reconfigured Xeon to add 64-bit extensions, making it work like Opteron, and the revamped Xeon chips are expected to be available in workstations that go on sale today and to be in servers soon.
AMD executives said Opteron would stand up to the new competition.
“Intel is playing catch-up,” said Pat Patla, Opteron’s marketing manager at Sunnyvale, Calif.-based AMD.
“They recognized that they left a hole big enough for us to launch AMD 64 right in the middle of, and that they needed to patch it up.”
Intel said it was introducing the revamped Xeon to meet customers’ needs. Demand for 64-bit chips is beginning to grow as the computers and software that run business, government and university networks are upgraded to handle more capacity.
Originally, Intel figured its Itanium would rapidly become the de facto standard for 64-bit server computing. Then came Opteron.
“It now appears Itanium will be for a very long time confined to the segment of the market where systems are priced at $25,000 and up,” said Nathan Brookwood, principal analyst with Insight 64, a technology consulting firm in Saratoga, Calif.
With 80% of the global chip market, Intel dominates AMD by nearly every measure. Last year Intel earned a $5.6-billion profit on sales of $30.1 billion, swamping AMD’s revenue of $3.5 billion and loss of $274 million.
Opteron has only a 3% to 4% share of the market in which it competes, according to technology market research firm IDC.
But the decisions by IBM, HP and Sun to offer Opteron-based servers was a major boost for AMD because up until then, its chips had been used primarily in less expensive personal computers.
Opteron will gain share as more IBM, HP and Sun systems are sold, said IDC chip analyst Shane Rau. “Opteron is going to be moving up the food chain,” he said.
Giving the Xeon chip 64-bit computing is risky for Intel, Rau said. “They want to keep Xeon competitive with Opteron, but as Xeon moves up in its capability, there’s a chance it might cannibalize Itanium sales,” he said.
The revamped Xeon is supported by a redesigned platform, or collection of chips and circuitry that form the equivalent of a computer’s central nervous system.
It includes technologies for better communication between the processor and the memory system while using less power, along with a major improvement in graphics, according to Intel.
The overhaul improved Xeon’s performance by as much as 30% in such areas as speed in accessing memory and moving data around the computer and the ability to host Web pages and run the Web programming language Java.
