The Santa Clara, Calif.-based chipmaker plans to release a 2.4GHz version of its Xeon chip for one- and two-processor servers during its developer conference in Taiwan, sources close to the company said. Dell Computer, Hewlett-Packard and others will use these chips in upcoming products.
Along with being faster than existing Xeons, the new chip will be the first Xeon manufactured on wafers with 300-millimeter diameters. More than twice as many chips can be produced from these wafers than standard 200-millimeter wafers for roughly the same cost. Intel started producing Pentium 4 chips on these wafers in the first quarter.
As a result, the new wafers can lead to higher profits, or provide insulation in a price war. The chip is expected to cost $613 in 1,000-unit quantities.
Intel dominates the market for chips for smaller servers, but competition is heating up.
Sun Microsystems plans to make a renewed push into this market later this year with inexpensive one- and two-processor Linux servers that will compete against wares from Dell, Compaq and other Intel customers, according to Sun executives. Sun will market two types of servers in this area. Some will be based on its own UltraSparc chip, and others will contain chips based around the "x86" architecture, the same architecture that underlies chips from Intel and Advanced Micro Devices.
Sun will not make these chips but buy them from Intel, AMD or another manufacturer. However, Sun's relationship with Intel has been rocky.
AMD is also coming out with more server chips. It entered the market last year with a multiprocessor version of its Athlon chip and the company now claims that it has gained 6 percent of the market for chips for small, x86 servers, according to AMD. Small manufacturers for the most part sell AMD-based servers.
Dean McCarron, an analyst at Mercury Research, could not confirm that AMD has obtained that much market share, but said that the company has definitely made progress. Eighteen months ago, he noted, AMD had no presence in the market.
On the other side of the world in New York, Intel will be holding press conferences to unveil cheaper versions of its Pentium 4 chip for notebooks.