Intel paying Sun to develop Xeon servers

SAN FRANCISCO--Intel is helping to fund the development of Sun Microsystems' upcoming servers with Xeon processors, Sun Chief Financial Officer Mike Lehman said Tuesday.

"For engineering, we will get paid for that by our friends at Intel," Lehman said at Sun's analyst summit here, discussing the upcoming line of Intel servers.

"Unlike our friends at Dell, we will disclose that," Lehman said, needling a rival currently afflicted with a shareholder lawsuit involving Intel payments.

Sun plans to begin selling the Xeon servers by the end of June, when Sun's fiscal 2007 ends, but for that period of time Sun expects "no significant" revenue from the deal, Lehman said.

Chief Executive Jonathan Schwartz emphasized that Sun isn't scrapping its formerly exclusive x86 processor supply relationship with Advanced Micro Devices. "We are adding Intel into the product line. We are ramping rapidly with AMD," he said.

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