Intel debuts low-cost Itanium 2 chips

The chip giant has tweaked its high-end server processor for blade servers and clusters, but the biggest modification is on price

Intel on Monday is to launch two new Itanium 2 chips, including an energy-efficient chip for blade servers and workstations that is priced to reach a mass market.

Although pricing will not be revealed until later on Monday, the energy-efficient chip, code-named "Deerfield", was planned to debut at $744 (£469), according to Intel product plans seen by ZDNet UK. That's substantially below the price of Intel's other Itanium 2 chips, which range from $1,338 to $4,226.

The price is only $107 above the company's fastest desktop and notebook chips, which sell for $637 and are manufactured in much larger volumes, making them cheaper to produce.

A companion chip, also launched on Monday, is tweaked for clusters, chains of one- and two-processor servers that when linked together can act like supercomputers. The Itanium 2 for clusters will run at 1.4GHz, contain a 1.5MB cache and cost $1,172, according to sources.

The Deerfield pricing seems deliberately calculated to attack one of the chronic problems associated with the Itanium line: slow sales. Since it came out in May 2001, the Itanium family has barely made a dent in the server market in terms of unit shipments. The chipmaker has, however, steadily increased performance and has funded application development, which could begin to change the picture.

Earlier Itanium chips were designed to crack the most lucrative segment of the server market, RISC-based Unix servers, which make up only 10 percent of shipments but nearly 50 percent of customer spending. With Deerfield and Itanium 2 for clusters, Intel is pushing the Itanium architecture into a much broader market, the 90 percent of servers the company estimates have two or fewer processors.

Intel sees this volume market as a potential back door into enterprises. "This could be a lead in for many of our customers," said Intel strategic marketing manager Alan Priestley. "If they begin using (dual-processor) Itanium 2 processors, they may end up deploying them elsewhere."

Although the servers are generally less sensitive to pricing pressures than PCs, cost is a factor in the kind of markets that Deerfield will address. Blade servers can contain hundreds of processors, which drives up costs. Workstations also have to compete with high-end desktops.

Currently, Intel serves the blade and workstation market with its Xeon DP line of processors, which range in price from $156 to $851. Intel also makes a line of Xeon MP processors, which are for servers needing four or more chips. Those chips start at $1,117.

While Xeons and Itaniums can be used in similar types of computers, they are quite different. Itaniums are 64-bit chips, which mean they can handle far more memory but need specialized software. Xeon chips can't juggle as much memory but run regular Windows and Linux code, a big selling point.

Intel said it isn't worried about the potential for customer confusion between Xeon and dual-processor Itanium 2 systems. "In the front-end server sector, a lot of them don't need more than 32-bit," he said. "In Web serving, most applications work well with 32-bit. There are other sectors of that market which require increases in performance, those who use authentication algorithms for example."

He said Intel would be recommending the new Itanium 2 systems for applications such as DNS servers and caching servers, which require large database lookups, an application which benefits from Itanium's memory-addressing capabilities.

Last month, Mike Fister, general manager of Intel's Enterprise Platform Group, said that the company would try to expand the breadth of the Itanium line, starting with Deerfield. Though the final price might vary slightly, Deerfield will likely cost far less than other members of its clan.

And, while the chip won't exhibit the same performance as top-end Itanium 2 chips, Deerfield won't be a slouch, according to Fister. The chip will perform at the same level, generally, as McKinley, the first version of the Itanium 2, which was rated well by analysts.

Deerfield will run at 1GHz and contain a 1.5MB cache. Although 1GHz is slow for a desktop, regarding performance, the 64-bit ability and other architectural enhancements put Itanium chips ahead of Pentiums.

The chip will also consume less power, and therefore emit less heat, than McKinley, an important factor for dense blade servers. A McKinley running at 1GHz with a 1.5MB cache costs $2,247.

CNET News.com's Michael Kanellos and Stephen Shankland and ZDNet Germany's Kai Schmerer contributed to this report.

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