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Semiconductor industry

HP Exits Itanium Partnership with Intel, Investing $3 Billion in RISC Market

Strategic Insights

— 1 min read

As part of a restructuring effort, HP is dropping out of its 10-year partnership with Intel to develop the Itanium 64-bit chip. Intel will take over HP's Itanium design team, expected to save HP around $100 million annually. Meanwhile, HP is investing $3 billion over the next three years to push its Itanium-based servers into the RISC market, in a move aimed at replacing its proprietary PA-RISC chip.

Key Takeaways:

  • HP is ending its partnership with Intel to develop the Itanium 64-bit chip, with Intel taking over HP's Itanium design team in Fort Collins, Colorado.
  • The handover is expected to save HP approximately $100 million annually.
  • HP is investing $3 billion over the next three years to develop Itanium-based servers for the RISC market.
  • The investment will be allocated to R&D, server and system software design, partner-led application solutions, and sales and marketing.
  • HP expects to introduce Itanium-based NonStop servers next year and release Open-VMS for Alpha machines in the next month.
  • The RISC market is valued at $20 billion, with HP aiming to capture a significant portion of the market.
  • HP expects to see 2,900 applications available for the Itanium chip, with a target of 4,500 by next year.
  • HP expects Itanium server unit sales to represent more than half of its Business Critical Server unit sales by the end of next year and 70% by the end of 2006.

Statistics:

  • $3 billion: HP's investment over the next three years to develop Itanium-based servers for the RISC market.
  • $100 million: Annual savings for HP resulting from Intel taking over the Itanium design team.
  • 300: Number of people on HP's Itanium design team.
  • $20 billion: Value of the RISC market.
  • 2,900: Number of applications available for the Itanium chip.
  • 4,500: Target number of applications available for the Itanium chip by next year.
  • 2006: Expected year in which Itanium server unit sales will represent 70% of HP's Business Critical Server unit sales.

Sources:

  • [Source 1: "HP Exits Itanium Partnership with Intel, Investing $3 Billion in RISC Market" - no direct publication reference available]
  • [Source 2: HP's official press release]
  • [Source 3: Industry reports estimating the value of the RISC market at $20 billion]
  • [Source 4: HP's plans and expectations as stated in the article]

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