Montecito server chip – a giant leap for Intel

Intel Corp. is set to launch its often-delayed “Montecito” dual-core Itanium chip for high-end servers Tuesday.

The company has already begun shipping the chips to server vendors, who would ship products on their own schedules, said Intel spokesman Bill Kircos.

The chip is a large improvement for Intel, even if it may not blow competitors like Sun Microsystems Inc.’s Sparc chips or IBM Corp.’s Power series out of the water, analysts say.

“It’s a huge step forward in terms of Itanium. Not only are they going to dual core, but power consumption will be below 100 watts. That’s amazing for its enormous size: 24M bytes of L3 cache and 1.72 billion transistors,” said Jim McGregor, principal analyst with the research firm In-Stat.

By comparison, Intel’s “Yonah” Core Duo chip has 151 million transistors, and its “Smithfield” dual-core Extreme Edition Pentium has 230 million. The actual core on Montecito is comparable to Pentium in size, but the new chip uses its vast extra memory to increase bandwidth and reduce latency, he said.

Intel, of Santa Clara, California, does not expect to sell Montecito as a high-volume product. Its typical users are government researchers doing massive modeling projects such as global warming predictions.

Even among high-end researchers, they comprise a niche market, since many institutions have begun to create virtual supercomputers by combining thousands of cheaper, midmarket processors.

The Tokyo Institute of Technology recently unveiled the world’s seventh-fastest supercomputer by building a system that connects 655 servers, each using eight Opteron processors from Intel rival Advanced Micro Devices Inc.

The mega-chip market has continued to shrink as Montecito slipped later and later on Intel’s calendar. It missed its original launch date in the fourth quarter of 2005, amid industry rumours that Intel would sell off the entire Itanium line.

Despite an increasing need for quick cash as it posted poor profits in recent quarters, Intel stuck with the project. That was a smart move, McGregor said.

“Intel has never gotten a positive ROI on this by my calculations, but the research has gotten them into new market segments and broadened their scope. There’s value beyond the financial numbers.”

Among major vendors, only Hewlett-Packard Co. is expected to offer many Itanium-based servers. But several smaller companies are eager to see the new chip.

Unisys Corp. will use Montecito to replace single-core “Madison” Itanium chips in its line of ES7000 enterprise servers, said Mark Feverston, director of enterprise servers and storage for Unisys Corp.

The new systems will be better than competing servers thanks to Montecito’s improved support for virtualization and easier system management, he said. Together, those attributes will allow users to consolidate their workloads onto fewer servers, helping to reduce power costs.

“It will enable our servers to achieve higher levels of performance in transaction processing and applications such as business intelligence, which require a huge number of fast queries on large databases,” Feverston said.

Unisys will support the new Itanium architecture for the long term, planning to accommodate both Xeon and Itanium 2 chips in its next generation of servers, due for release by the end of 2007.

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