Intel Introduces Server Chip

Intel Corp. introduced its latest microprocessor for server computers Monday, one of a trio of new chips the world's biggest semiconductor maker is counting on to regain market share lost to Advanced Micro Devices Inc.

The new chip, the Intel Xeon 5100, is the company's answer to AMD's Opteron processor, whose performance and power management have stolen share from Intel for more than three years. Intel says the new Xeon more than doubles the performance of its previous top-of-the-line server chip while drawing 40 percent less power.

"We're back in a position we're used to being in and that's undeniable leadership," Intel Vice President Tom Kilroy told analysts and reporters.

Intel shares rose 28 cents, or 1.6 percent, to $18.28, in Monday trading on the Nasdaq Stock Market. AMD shares fell 48 cents, or 1.9 percent, to $24.66 on the New York Stock Exchange.

The Xeon 5100 is the first chip to come to market using a new blueprint, or microarchitecture, Santa Clara-based Intel designed from scratch to help lower the energy consumption of servers and PCs. As businesses' computing needs have grown over the past several years, power consumption has emerged as one of the chief costs of running large data centers.

Greg Brandeau, vice president of technology for Disney's Pixar Animation Studios, the maker of "Toy Story," "Finding Nemo" and other computer-generated movies, said one of the top challenges of his job is acquiring enough computing power to keep up with his company's growing needs.

"Cars," the latest Pixar film that opened earlier this month, required 300 times as much computing power as any previous production, he said.

Brandeau said he has run Pixar software on the new Intel chips and found they gave 30 percent better performance while using half as much power as older Xeons, which he used to make "Cars."

"The performance is really stunning," he said.

Intel said the new chips, which feature two computing cores, or "brains" on a single chip, also outperformed AMD's top Opteron product on more than 25 benchmarks commonly used to compare competing computers.

Besides using a new microarchitecture, the Xeons are loaded with new features designed to boost power efficiency and add new functions, Kilroy said. One allows the chip to draw less current by shutting off parts when they're not needed. Another feature adds so-called virtualization capabilities to the chip so administrators have more control over how tasks are doled out to various parts of their networks.

Prices range from $209 to $851 each depending on their features when bought in volume.

The new Xeons are the first of three new products Intel is rolling out this summer in a bid to regain market share lost to AMD. Over the past few years, Sunnyvale-based AMD, once considered an imitator of Intel, has introduced a host of homegrown technologies that have caused many of its processors, mostly in the server and desktop arena, to outperform those of its larger rival.

In late July, Intel is expected to roll out a new desktop processor based on the new microarchitecture, dubbed "Core." Intel has claimed the Core 2 Duo, which will feature two computing cores, will close the performance gap between its current desktop offerings and AMD's Athlon 64 processor.

A third release for notebook computers is expected in August, analysts say.

Intel has been letting customers test the new Xeon chip, and the response has been largely favorable, some analysts said.

"Intel is clearly far more competitive now than they have been for the last few years," said Nathan Brookwood, an analyst with the research firm Insight 64. "This is a big change and a big plus."


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