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Sun Microsystems is cutting prices on servers running Advanced Micro Devices’ Opteron chips, a move designed to put pressure on competing systems powered by Intel Xeon processors.

The Santa Clara, Calif., company is cutting prices on standard configurations of its Sun Fire X2100, X4100, X4200 and V40z servers by as much as 37 percent, Sun announced Tuesday.

The cuts were announced at the same time that Sun was touting the performance of the machines and the growing demand for them.

Click here to read more about Sun’s new Opteron-based workstations.

Graham Lovell, senior director of x64 servers for Sun’s Network Systems Group, said the company has shipped tens of thousands of the “Galaxy” two-socket X4100 and X4200 servers since they were announced in September, and that unit shipments of Sun systems running on Opteron were up 87 percent in the company’s second fiscal quarter.

The price cuts are intended to strike at Intel while it remains behind AMD in the dual-core arena, Lovell said. In addition, price cuts are a way to remain competitive in the x86 server space, he said.

“In this market, you need to be aggressive, and this is an aggressive move,” Lovell said.

Read an eWEEK Labs review here of the Sun Fire T2000, with details on how Sun’s “Niagara” pushes processing power limits.

The Opteron systems are a key part of Sun’s plans to revamp its server portfolio. Sun in December rolled out the first of the servers running on its new UltraSPARC T1 processor, which offers up to eight cores that each can run up to four instruction threads simultaneously.

Sun also is working on the next generations of the chips, code-named Niagara II and Niagara III. Another project will result in systems running on another processor that runs fewer threads, code-named Rock, which is due in 2008.

In addition, Sun is partnering with Fujitsu on a family of servers, dubbed the Advanced Product Line, which will run on Fujitsu’s upcoming dual-core SPARC64 chip. Those systems are due out later this year.

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