By Dan Jones
Looking for profitable niche markets for its Alpha processor, Compaq Computer Corp and its partners, Samsung Corp and Alpha Processor Inc, said yesterday that they are pumping $500m into development work and manufacturing improvements for the chip. Samsung plans to invest $200m in new semiconductor manufacturing technologies, while API, the joint venture between Samsung and Compaq, is investing $300m in developing the chips for Linux applications and internet infrastructure servers.
Samsung plans to spend its investment in upgrading its chip production facilities, with copper interconnect and silicon-on- insulator technology and low-k dielectrics. The Korean company is preparing for the launch of the EV7 (0.18 micron) and EV8 (0.13 micron) over the next three years and looking to become the major supplier of the more advanced chips to Compaq. Samsung has already beaten out Intel Corp to become the major supplier of the current generation of Alpha chips, the EV68.
API will concentrate on optimizing the chips for Linux applications and developing the market for the chip in network caching engines and other web server applications. Compaq say that Network Appliance Inc already uses the Alpha as the main processor in all of its caching engines. Compaq says that it views these markets as an incredible growth opportunity for Alpha. The company also talked up its market share in the high performance, parallel and supercomputing markets.
However, after ceasing work on porting the Windows NT and 2000 operating systems to Alpha systems, Compaq has given up any ambitions of being a player in the mainstream server market. Keith Diefendorff, analyst at the Microprocessor Report, wonders how the chip will fare after Intel introduces its first 64-bit chips in the middle of next year. Regardless of its technical merit, he argues, the IA-64 juggernaut is going to make life miserable for other server processors, probably forcing most of them into a niche. Having said that, however, there probably a few big niches that Alpha could capture – large enough even to justify a $500m investment in it. Compaq says that it plans to up the investment $1.5bn over the five years.
