Intel to launch low-power version of Xeon server chip

Chipmaker Intel Corp said it is planning to launch a low-power version of its brawny server processors, potentially heading off competitors hoping to expand into the data center with energy efficient-chips based on smartphone technology.

Intel has already launched a line of its Atom mobile chips that are tweaked to work as low-power server chips.

The announcement, which was made on Monday at an event with industry analysts and media, means Intel will go a step further by offering a low-power version of its powerful Xeon processor with built-in features including connectivity and memory.

It also reflects the willingness of CEO Brian Krzanich, who took over in May, to make major changes to how Intel approaches its different markets.

By launching lower-power chips for servers, Intel is trying to stay ahead of Advanced Micro Devices, Applied Micro Circuits Corp and other smaller rivals hoping to disrupt the top chipmaker's dominance of the data center with upcoming components designed with low-power smartphone technology licensed from ARM Holdings.

"Intel's announcements demonstrate they will try to defend their turf against ARM-based servers and specialty processors," said Pat Moorhead, an analyst at Moor Insights & Strategy. "Up until today, it was a bit of a guessing game for Intel that today has at least 95-percent server market share."

Diane Bryant, in charge of Intel's data center business, said the new component, based on the upcoming Broadwell version of Intel's Xeon high-performance chips, will launch next year.

Energy-sipping chips similar to those used in smartphones and tablets lack the horsepower of traditional server processors made by Intel. But data centers that combine many low-power chips instead of just a few heavy-duty processors may provide more computing power for less money and use less electricity.

Microservers have yet to gain serious traction with traditional corporate customers like banks and manufacturers, and the potential size of the market remains unclear.

The new version of Broadwell is part of Intel's move to integrate more features onto its chips, like memory and graphics. "System on chips," as they are known, are already widely used in smartphones and tablets, but less in the data center. Intel is also beginning to make "system on chips" for laptops.

Intel dominates the PC and server markets, but it was slow to design chips for the mobile market, where chips using technology from ARM Holdings have become ubiquitous.

© Thomson Reuters 2013