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Intel is preparing to launch its long-awaited dual-core Itanium 2 processor, dubbed “Montecito,” in July, the latest attempt by the giant chip maker to re-establish its technological dominance in the server space.

Intel will announce the chip at an event in San Francisco July 18, according to two sources close to the company. An Intel spokesman declined to confirm the date.

Rival Advanced Micro Devices, of Sunnyvale, Calif., has made inroads into the server chip market in recent years, in large part by beating Intel in a number of areas, such as 64-bit computing in x86 processors, dual-core technology and power efficiency. Intel officials view the new lineup of processors—including Montecito and the recently released Xeon 5100 “Woodcrest” family of chips—as solid answers to AMD’s technology. “Tulsa,” the next Xeon chip for multiprocessor servers, is due out later this year.

Analysts and OEMs applauded Woodcrest—built on Intel’s new Core architecture—as a technology that will improve performance while reducing power consumption. Montecito is expected to offer similar features, from dual cores to Intel’s on-chip virtualization technology.

However, some analysts are unsure whether the new features will be enough to make any difference in Itanium sales. The key, said Charles King, an analyst with Pund-IT Research, is Hewlett-Packard, the only top-tier OEM with widespread support of the architecture.

“The tough thing about Itanium is, of the four largest server vendors out there, three of them either have no Itanium products or any real products in their plans,” said King, in Hayward, Calif. “Itanium at this point is basically HP’s game.”

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HP, of Palo Alto, Calif., is standardizing its high-end server line on the chip and holds more than 80 percent of the Itanium market. A number of second-tier server makers—including Fujitsu, NEC and Unisys—also are counting on Itanium for their high-end systems.

Several hardware and software makers last year created the Itanium Solutions Alliance designed to promote the architecture. IDC has pointed to the group as a factor in predicting that the Itanium market will grow from $1.4 billion in 2004 to $6.6 billion in 2010.

The launch of Montecito has been delayed several times. Most recently, the chip was set for release earlier this year but was delayed until the summer due to quality issues.

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