The next generation of Itanium chips, codenamed McKinley, will carry larger than expected price tags because of their larger than usual size, industry experts claim.
Official specifications show that the chip will measure 464mm2, which is extremely large by microprocessor standards, said Kevin Krewell, an analyst at Microprocessor Report. This will mean higher manufacturing costs because the greater size will lead to more rejects on the production line, he explained.
Analyst reports show that sales of Itanium chips have been disappointing. Only 500 servers containing Itanium have been sold, according to IDC, although Gartner figures show that 2,601 servers have been produced. The discrepancy in numbers stems from the fact that many servers have been given away to seed the market.
There are also signs that Intel is not relying too heavily on 64-bit sales. The company is enabling its 32-bit Pentium chips to run in 64-bit mode in a release planned for 2003.
McKinley, Intel's second 64-bit processor, is due to hit the market this year. It is still in development and Intel has said it will only start talking about it publicly at the Intel Developers Conference later this month.