June 17, 2002 5:25 PM PDT

Intel to make Itanium 2 servers

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Intel will manufacture complete servers and other components based on its upcoming Itanium 2 processor as a way to smooth acceptance in the market for the server chip.

The upcoming product family, code-named Tiger, will include motherboards, chipsets, enclosures and a complete four-processor Itanium 2 server, according to a company representative. Intel will not sell these products to the general public, but to computer manufacturers, which will then re-brand them as their own or incorporate them into their own products.

The Tiger family will come out in the second half of the year. Itanium 2, formerly code-named McKinley, is expected in July.

Although Intel derives the bulk of its revenue from selling chips, the company has steadily expanded into motherboards, chipsets and, in some instances, complete computer design. Both Hewlett-Packard and IBM, for instance, sell servers for the telecommunications industry under their own respective brands that were designed and primarily put together by Intel.

Buying a chassis or a complete server, rather than just a chip and other select components, drastically reduces the independent engineering generally required to bring a new server to market. In turn, this reduces costs and development time.

"A number of our (server) units go into regional leaders," said Phil Brace, a marketing director for Intel. Kraftway, a Russian server maker, and Chinese giant Legend Holdings both purchase complete Intel servers and then subsequently adjust them for their respective local markets, he added.

Easing acceptance for Itanium 2 is a leading obsession at the Santa Clara, Calif.-based company. The chip will go into servers that directly compete against the higher-end Unix machines from Sun Microsystems and IBM. Four-processor Itanium 2 systems will sell for between $20,000 and $72,000.

Intel sells more chips than anyone else in the server market, but the vast majority of those chips end up in comparatively inexpensive one- and two-processor machines, which start at below $1,000.

The first Itanium chip, though, has been a commercial dud. Delayed several times, the processor found few takers among computer manufacturers or corporate buyers. Middling performance, a lack of software and a declining economy also hurt Itanium, according to executives and analysts.

Intel and others, though, assert that the experience with Itanium 2 will be different. The chip will provide twice the performance of the first Itanium, according to Intel. IBM, HP, NEC and other manufacturers have also invested heavily to develop servers, chipsets and other technology for Itanium 2 servers.

A greater number of operating systems and databases will also be appearing around the time the Itanium 2 comes out. The company has also been working with third-party developers and hardware manufacturers in Intel offices worldwide to tune products for Itanium 2.

"We're well cemented on our path toward IA-64 (the name of Itanium's architecture) tools," said Mike Fister, senior vice president of the Enterprise Platform Group at Intel.

Itanium 2 will run at 1GHz when it comes out and will come in two types. One version will come with 1.5MB of level 3 cache memory. Caches, which are integrated into the processor, store data that needs to be accessed rapidly. A more expensive version will come with 3MB of cache.

The 1.5MB and 3MB chips will actually look identical. Only half of the cache will be activated in the less-expensive version. In the future, Intel may eliminate the unused cache area on the 1.5MB chip to reduce its size and, hence, its manufacturing cost, Fister said.

 

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