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Lisa Graff, director of the Intel enterprise processor marketing group, said Intel will add a 6MByte cache to its Itanium 2 processor, codenamed Madison, this year and a 9MByte cache in 2004.
The Madison has a clock speed of 1.5 GHz, and larger caches would allow organisations to run complex software faster.
The lower-priced processor, codenamed Deerfield, will be configured for use in dual-processor servers and will offer the same clock speed and cache as the Madison chips.
Exisiting Itanium processors cost from $1,338 (£828) for a chip with a 900MHz clock speed and a 1.5MByte cache to $4,226 (£2,614) for a 1GHz processor with a 3MByte cache.
Intel's latest Itanium processor road map said the "Montecito" dual-core Itanium processor would be manufactured with the company's 90nm process technology.
The dual-core Montecito would feature two processors on a single piece of silicon, allowing it to execute operations faster than a dual-processor server.
Graff said the new Itanium chips are "absolutely aimed" at Sun Microsystems, which has the bulk of the high-end server market.
Sun spokesman Mark Richardson said: "Our road map keeps us well ahead of the competition. Nearly one out of every two 64-bit chips shipped is a SPARC processor."