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Despite Setbacks, Intel Says Itanium Is Here To Stay

Say this for Intel—after five years of modest sales and scaled-down ambitions, it's not giving up on Itanium.

Intel, the world's largest maker of computer chips, unveiled five new chips for servers in its Itanium 2 product line Tuesday, the first Itaniums to contain two processing cores and the ability to execute multiple "threads," or streams of software instructions, at the same time. The chips deliver more than twice the database performance of previous-generation Itaniums, and draw 2.5 times less electric power—a big selling point with CIOs. But five years after Intel delivered its first Itanium chips to high expectations, initially poor reviews, and large sunk costs, the company still plans to recoup its research and development investment.

"We're working pretty hard to get it to a profitable product," said Pat Gelsinger, senior VP of Intel's digital enterprise group, in an interview following a press conference in San Francisco Tuesday. "If we could unwind the clock, I would have just built a RAS version of Xeon to attack the market," he said, using an industry term for "reliable, highly available, and scalable" chips, and referring to Intel's Xeon server chips, which employ the widely used x86 instruction set. Itanium uses a less popular design called EPIC.

In the 1990s, when Intel and Hewlett-Packard were designing the Itanium and its EPIC architecture, leading computer designers doubted whether x86 chips were scalable to large workloads, says Gelsinger, formerly Intel's CTO, and a protege of company co-founder Andy Grove. That ability was "highly questioned," he said.

Now, x86 chips with 64-bit extensions from Intel and its top competitor, Advanced Micro Devices, commonly handle large computing jobs. Intel has three more generations of Itanium on the drawing board, but Gelsinger declined to say when the product would provide a return on its initial investment, estimated to be in the billions of dollars. He also declined to say how much Intel had spent on the chip.

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