Compaq Computer Corp, the biggest personal-computer maker, will phase out its Alpha-brand server-computer chips and instead use Intel Corp processors for its most powerful machines.
All of Compaq's servers will be based on Intel's Itanium chip by 2004, the company said. Compaq plans to build one more version of the Alpha chip and will transfer its Alpha-related technology to Intel. Financial terms weren't disclosed. Intel plans to offer jobs to Compaq chip designers and related staff.
Computer makers such as Houston-based Compaq, International Business Machines Corp and Hewlett-Packard Co largely have had to design their own chips for the high-end computers that run corporate databases. Intel, the biggest chipmaker, hadn't offered anything powerful enough to handle the hefty tasks of those machines until it developed Itanium and its successor, McKinley.
``It's an admission that Alpha could not continue to maintain its performance advantage,'' said Terry Shannon, publisher of Shannon Knows Compaq, an Ashland, Massachusetts-based industry newsletter. ``Intel gets the Alpha design team and more visibility for its server chips.'' Compaq, Hewlett-Packard and rivals have been trying to wrest control of the market for high-end servers away from Sun Microsystems Inc, which uses its own chips and operating software. Itanium and McKinley will be the next weapon in that fight, executives and analysts have said.
Alpha, which helped build Compaq's server sales, is being outpaced by chips from rivals and these new offerings from Intel, analysts said.
The agreement is not exclusive. Compaq could use chips from Intel competitors Advanced Micro Devices Inc and Transmeta Corp.
Intel will offer employment to Compaq workers affected by the Alpha chip's demise, the companies said.
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