SAN FRANCISCO – Intel Corp. (INTC) said on Tuesday it will start selling chips with four processing cores in November as the world's biggest microchip maker tries to build a lead over rival Advanced Micro Devices Inc. (AMD)
The chips, unveiled by Chief Executive Paul Otellini at an Intel forum, will hit the market a month or two earlier than expected, but analysts said they would do little to stem market share lost to AMD since they will initially only target high-end servers and gaming computers.
"It gives them technology bragging rights," said Nathan Brookwood, head of industry research firm Insight 64.
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"Even with the stronger product line from Intel, AMD will continue to gain share for the next few quarters just because of all the momentum they've built up."
Santa Clara, California-based Intel has been losing ground to AMD and hopes new products, combined with steep discounts on older models, will help reverse that slide.
"We still need to pay attention to the fact that many of Intel's mainstream products are still embedded in a dogfight [with AMD]. This quad-core is an extreme product, it plays to 1 percent or less of the market," said Douglas Freedman, an analyst with American Technology Research.
Over the past few months, Intel has also announced the sale of two under-performing business units and said it will reduce its work force by 10,000 jobs — or 10 percent — to help cuts costs and stay competitive.
Intel shares rose 2.8 percent to close at $19.96, while AMD shares were 2.9 percent to $25.99.
Intel's stock is down by about a quarter since the start of the year, compared with a slide of about 17 percent for AMD.
Intel's current top-end chips have two processing cores, allowing them to better handle multiple tasks at the same time. The company has forecast that future chips will eventually contain dozens or even hundreds of cores.
The new chips will not have four cores on a single slice of silicon, but instead consist of two dual-core chips stuck together.
AMD has played up that distinction because its quad-core chip due out in mid-2007 will integrate the cores fully, boosting performance by letting them swap data and share resources more easily.
Intel said it will have an integrated quad-core chip when it upgrades its manufacturing technology at the end of 2007 and in 2008.
But it maintains that its current approach lets it bring a quad-core product to market faster, using existing production techniques and with a lower rate of defects.
"The approach we've taken is to being first. We expect to ship very large volumes of quad-core in servers before we expect our competitor to ship any," said Steve Smith, Intel's vice president of desktop platforms.
The four-core desktop chip will go on sale under the Core 2 Extreme brand and will be 70 percent faster than its dual-core predecessor, while the server version will be sold under the Xeon brand and boost performance by 50 percent, Intel said.
Cheaper versions of the chips are due out in early 2007.