Sun is going to use Intel chips instead of its own SPARC chips. This is pretty momentous news in the chip shop. It, once again, puts AMD under severe pressure in this very high stakes game.

To give you are idea of the money involved Intel is thinking of opening another fabricating plant — a fab in the slang of the industry — in either India or China. That is one factory producing chips. Cost will be about 3.5 billion.

As Everett Dirksen is alleged to have said, ‘A billion here, a billion there, pretty soon you’re talking about real money. (In truth, I doubt he ever said it. It is probably urban myth.)

So if Sun starts using Intel’s Xeon processors in its x86 servers what are the benefits?

The one for Intel, obviously, is that it sells a lot more of its high-end chips.

For Sun the attraction is that Intel will endorse the x86 version of Sun’s Solaris operating system. That brings it to the grown-up’s table with Windows and Linux. Intel devote engineering resources to validate the software and also help with hardware support such as support for chip power management.

Things have not always been this cozy between Sun and Intel.

Sun gave Intel the flick in early 2005 and opted for Advanced Micro Devices (AMD) Opteron instead saying Intel’s chips were slower and more power-hungry. Which, at the time, was pretty fair comment. However, Intel has raised its game with the new dual-core and quad-core Xeon chips and these are dragging some of the market back from AMD.

Sun, coppering its bets, will probably continue to sell servers using AMD’s Opteron and, possibly, Sun’s own Sparc processors. But the move to Intel is a big step. It must give the head of Intel, Paul Ottelini, seen in our picture above, a holiday in his heart.

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Entry was posted on Monday, January 22nd, 2007 at 2:11 am under Technology.

Read more entries by Gareth Powell.
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