Intel plans quad-core computer chip

updated 8:29 a.m. ET Sept. 27, 2006

SAN FRANCISCO - Intel Corp. plans to begin shipping microprocessors that have four computing engines on a single chip — products that analysts say will help it win back market share from rival Advanced Micro Devices Inc.

The first chip, the Intel Core 2 Extreme quad-core processor, will be available in November.  Intel says it will deliver a 70 percent performance improvement over Intel's current chips, which have one or two computing cores. 

The new chip is aimed at gamers, programmers and other people with heavy-duty computing needs.

For general consumers, Intel will ship a quad-core chip starting in the first quarter of 2007.  For businesses, Intel will begin shipping four-core server chips later this year. A low-energy, quad chip for servers will be launched early next year, the company said Tuesday.

Offering high performance while maintaining energy efficiency is the name of the game in chip industry, CEO Paul Otellini said at the Intel Developer Forum.

"The industry is going through the most profound shift in decades, moving to an era where performance and energy efficiency are critical in all market segments and all aspects of computing," he said.  "The solution begins with the transistor and extends to the chip and platform levels."

Otellini said the Santa Clara-based company's chips would deliver a 300 percent improvement in performance per watt over the next four years.

The new products give Intel — the world's largest chip maker — the opportunity to reverse sinking profits and regain market share stolen by AMD.  Earlier this month, Intel announced it would cut 10 percent of its staff, or 10,500 jobs positions, to save $3 billion per year by 2008.

Analysts have criticized Intel for reacting too slowly after AMD's 2003 launch of the Opteron and Athlon 64 chips for servers and desktop PCs.

AMD will introduce a particularly efficient and fast quad-core chip for high-performance servers in mid-2007, said spokesman John Taylor.

"Our strategy is consistent — it's a customer-focused strategy that makes the transition as easy and benefit-rich for the customer as possible," Taylor said.

But it's unclear whether AMD's offering will make up for Intel's early lead, said IDC analyst Bob O'Donnell.

"Intel moved up this announcement specifically as an offensive blow against AMD, and it gives Intel a good six- to nine-month lead," O'Donnell said.  "They're both taking this battle seriously. There's no question AMD will react — it's just a matter of when."

Shares of Intel gained 55 cents — nearly 3 percent — to close at $19.96 in Tuesday trading on the Nasdaq Stock Market. Shares of AMD lost 78 cents — nearly 3 percent _ to close at $25.99 on the Nasdaq.

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