) --


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intends to cancel the rollout of its Larrabee graphics chip, a setback in the company's plans to compete with


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Advanced Micro Devices

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for high-performance graphics chips.

Intel has been planning a major move into this new semiconductor market with a product it has been discussing publicly since April 2007, the

Wall Street Journal

Intel had promised initially to deliver the first version of Larrabee in 2009, butr later said the product might not arrive until 2010. The chip is capable of generating complex videogames graphics and high-performance computing tasks.

Intel told the


it won't offer the chip conventionally but will make it available as a platform to help programmers design new applications.

"The silicon and software development are behind where we hoped to be at this point in the project," said Nick Knupffer, an Intel spokesman.

Intel had received skepticism about the Larrabee product earlier this year, with analysts unimpressed with an initial public demonstration in September of the chip's graphics performance.