updated 2/11/2004 4:57:23 PM ET 2004-02-11T21:57:23

Intel, the world's largest chipmaker, will next week announce a radical shift in strategy with a technology that seeks to stem growing interest in rival Advanced Micro Devices' (AMD) latest microprocessors, but at the risk of harming multi-billion dollar investments in its own high-end Itanium chips. 

The announcement will describe Intel's plans to add 64-bit technology to its mainstream 32-bit microprocessor families, according to people close to the company. The 64-bit capability is essential for large corporate computing systems, while 32-bit technology is sufficient for PCs and servers. 

The technology announcement follows mounting pressure from key customers and Wall Street analysts for Intel to respond to the competitive challenge from AMD's Opteron line of microprocessors. 

These were introduced in mid-2003 and offer both 32-bit and 64-bit capabilities. They quickly garnered a huge amount of interest, boosted by Sun Microsystems and IBM announcing powerful Opteron computers. 

AMD said Opteron was directly aimed at Intel's lucrative 32-bit Xeon server chip business.  The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused. 

But analysts said it also threatened a 10-year-plus effort by Intel to establish its Itanium line in core corporate computer markets. 

"Itanium is clearly not at the point where Intel wanted it to be at this stage, and so it has to be extremely careful how it positions its Opteron competitor at a time when Itanium has begun picking up some momentum," said Matt Wilkins, a microprocessor analyst at iSuppli, a leading US chip market research company. 

Intel declined to discuss the technology announcement. It is expected at an Intel conference in San Francisco, along with a demonstration of a prototype system. The 64-bit technology will debut first in a server microprocessor, a version of its Xeon microprocessor, then it will be added to desktop and mobile platforms. 

A product, or an introduction date will not be announced. Instead, the company will reiterate recent comments by Paul Otellini, the president and chief operating officer of Intel, that the company would introduce a chip with 32-bit and 64-bit capabilities when commercial software and applications became available. 

This is expected to be in early 2005, when Microsoft is to release operating systems that support such chips. 

Intel is understood to be unconcerned about AMD's early market entrance because it believes the lack of commercial software will limit Opteron server sales.

© The Financial Times Ltd 2010. "FT" and "Financial Times" are trademarks of the Financial Times.


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