Intel's profits rose 15 percent in its third quarter

October 2004

Intel’s profits rose 15 percent in its third quarter

About one month before HP reports its year-end results, its Itanium partner Intel has posted a third quarter that showed $1.9 billion in earnings. Intel said it experienced slower sales than expected for its microprocessors, a product line that includes the Itanium 2 chips which drive the HP Integrity servers. But Intel’s CFO Andy Bryant said the sales of chips for server systems was strong for the period, even though the overall profit numbers were disappointing. Analysts say they expect Intel’s gross profits to erode in the next quarter and beyond.

HP has announced plans to contribute to those profits with newer versions of the Itanium line. The Montecito processors are expected to become part of the Integrity lineup during 2005, a year when more migrating HP 3000 sites may be considering replacements for their servers. Some of that Integrity power can be put to work this fall on HP’s latest multiple operating environment. The HP Virtual Server Environment lets HP-UX and Linux share a single Itanium 2 CPU and IO resources in what HP is calling the HP Integrity Virtual Machine. More information on products in the emerging HP virtual lineup is at www.hp.com/go/virtualization.

But HP also continued to expand its offerings which use the 64-bit Itanium alternative from Intel. HP’s ProLiant line, which is being picked to replace some 3000s at migration sites, was among the first to get a new generation of servers that use the Intel Xeon processor with Extended Memory 64-bit Technology (EM64T), formerly code-named Nocona. Sandia Labs is building a supercomputer out of EM64T processors. HP is also selling low-end servers based on the Opteron 64-bit chips from AMD.