September 24, 2004 1:16 PM PDT

HP discontinues its Itanium workstations

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Hewlett-Packard, one of the most aggressive promoters of Intel's Itanium family of processors, is ditching its line of workstations that use the chips.

The decision by the Palo Alto, Calif.-based computing giant will likely be interpreted as a large symbolic blow to Itanium's fortunes. HP co-designed the basic Itanium architecture with Intel and has committed to adopting the chip extensively in its high-end server line.

HP is getting rid of its Itanium workstations, which use the Itanium 2 chip, because of the growing popularity of chips that can run 32-bit and 64-bit software similar to standard Windows and Linux code, such as the Opteron from Advanced Micro Devices and some of Intel's latest Xeon chips. Itanium requires software specially ported to the chip.

"In working with and listening to our high-performance workstation partners and customers, we have become aware that the focus in this arena is being driven toward 64-bit extension technology," an HP spokeswoman wrote in an e-mail. "The decision to discontinue HP's Itanium workstation investment is limited to the workstation market and has no impact on HP's success with Itanium-based servers."

Itanium 2 chips came in the zx2000 and zx6000 workstations. HP discontinued the workstations on Sept. 1 and will stop shipping new systems on Oct. 31.

"The workstation market has never been the main focus for Itanium," an Intel representative said. "Itanium continues to make inroads in the high-end server market."

Earlier this year, HP delivered a knock against Itanium's future, when it announced that it would start selling Opteron servers.

The Itanium saga is one of the most closely watched dramas in the semiconductor world. HP and Intel began to collaborate on a server/workstation chip back in 1989. Because of Intel's manufacturing expertise and the processor know-how at the combined companies, many believed that the chip line would come to dominate the server market and even creep into desktops. Nearly every major server maker agreed to adopt the chip.

Several delays, however, resulted in the first version of Itanium coming out in 2001. Performance was middling. New versions of the chip, dubbed Itanium 2, that emerged in 2002 and 2003 cured many of the performance problems. Indeed, Itanium 2 computers now regularly sit near the top of benchmark tests.

Still, sales have not taken off, and some customers, such as IBM, have begun to emphasize other chips. Intel shipped just more than 100,000 Itanium 2s last year, and the company recently said it will not hit its goal of doubling that number this year.

Analysts have regularly scaled back sales projections for the chip.

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