Intel Unveils 64-Bit Chip

As expected, the chip giant responds to a competitive challenge from AMD.
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Intel

(INTC) - Get Report

will roll out a server chip similar to one already on the market from

Advanced Micro Devices

(AMD) - Get Report

, the Santa Clara, Calif.-based chipmaker said Tuesday at its developers' forum in San Francisco.

Starting in the second quarter, Intel will add a so-called 64-bit extension to its dual-processor Xeon server chip. That means the silicon will be able to crunch 64 bits of data at a time, in addition to its 32-bit capability.

AMD has

steadily gained traction with big server vendors since it introduced a chip with similar features last year.

Prior to Tuesday's announcement at its twice-yearly convention, many observers expected Intel to address the AMD challenge on 64-bit architecture.

Also in the second quarter, Intel will begin offering 64-bit capability with Prescott, the latest version of the Pentium chip, to be aimed at the workstation market.

Previously, Intel offered only a 64-bit architecture via its high-end Itanium chip. However, Itanium has proven a disappointment on the sales side, despite a tremendous investments in time and dollars by both Intel and co-developer

Hewlett-Packard

(HPQ) - Get Report

.

In comments before the press, Intel CEO Craig Barrett sought to refute one financial analyst's suggestion that the new, 64-bit capable Xeon might cannibalize sales of pricier Itanium. Itanium is "all about reliability, scalability, accessibility -- big number-crunching capability," he said. Itanium would be used for "big iron," or the most data-intensive hardware systems, Barrett continued, while Xeon would be more appropriate for workstations and servers used in smaller-scale computing.

Intel also said

Microsoft

(MSFT) - Get Report

will roll out an operating system to support 64-bit Xeon. Linux vendors

Red Hat

(RHAT)

and

Suse

are expected to offer compatible software between the middle of 2004 and the end of the year.

Intel hasn't yet announced a 64-bit capability for PCs; AMD

introduced 64-bit desktop chips last fall.

Intel shares were recently up 64 cents, or 2.1%, to $30.78.