Intel to Introduce Dual-Core 64-Bit Server CPU

Intel Corp. (INTC) is set to introduce a long-delayed chip for high-end computers on Tuesday, hoping to breathe life into a product line that has lagged expectations despite billions of dollars of investment.

The latest addition to Intel's Itanium processor family has 1.7 billion transistors — triple that of its predecessor. It also has two processing cores to handle multiple tasks at the same time, and a huge amount of memory to crunch data faster.

"If nothing else, it's a manufacturing feat," said Jim McGregor, principal analyst with In-Stat, a market-research firm. "It's getting them back in the competitive offering."

Long-known by the code name Montecito, the chip is part of a development effort that originally included Hewlett-Packard Co. (HPQ) and was intended to replace aging Pentium family of processors.

The chips were also meant to compete against the most powerful offerings from competitors like International Business Machines Corp. (IBM) and Sun Microsystems Inc. (SUNW).

But Itanium failed to win widespread adoption, and some analysts have speculated that Intel may jettison the unit as it tries to cut costs and focus on its core business.

The product had another setback in October when Intel said it was delaying volume production by several months until mid-2006, citing quality issues. The new Itanium will be officially unveiled on Tuesday.

"What to do with the Itanium line is still a quandary. As far as the numbers I can crunch show, it's never made a positive return on investment," McGregor said, adding that he thought Intel would stick with Itanium until at least 2008.

The chip is expected to be used mainly for high-end computing tasks such as modeling climate patterns.

Shares of Intel were down a penny at $17.87 in early afternoon trading. The stock has fallen 38 percent from a 52-week high hit almost exactly one year ago as the company loses market share to rival Advanced Micro Devices Inc. (AMD).