Intel (an SVW sponsor) today will introduce its Opteron-killer Dual Core Xeon server chips which use less electric power and provide more performance in key benchmarks.

Advanced Micro Devices' Opteron servers have become popular because they use less electric power than equivalent competing microprocessors. This allows computer companies to pack more computing power into the same amount of space.

The low-power data center is a top goal of enterprise vendors and that's why Advanced Micro Device's Opteron has done well. Data centers are being limited by the amount of electric power their local utility can offer, and many are operating at their top limits. Some cannot install more computing power because they don't have the electric power to run the extra equipment.

To expand computing capacity, data centers are turning to low power consuming servers, the fastest growing segment of the server market. More computing power can be installed per kilowatt of energy, or customers can choose cooler systems that need less cooling and create substantial savings on electric power. Large data centers can spend tens of millions of dollars on annual electric power costs.

Intel (INTC) will discuss details about its Core Xeon server chips at a press event in San Francisco Monday morning. They represent the first of a family of new chip designs that are optimized for low-power consumption. They are also built in smaller geometries which further cuts power consumption.

Intel estimates its new chips use 35 per cent less electric power and provide as 80 per cent performance boost against comparable prior chips.

I recently met with Lisa Graff, general manager of server platforms at Intel. She said that the benchmarks of the new chips will be much better than for Opteron. There is an Intel site offering performance benchmarks at http://www.intelstartyourengines.com/

It can be difficult to directly compare AMD and Intel server chips because of different server designs and the application loads on the servers. But it is the overall power savings of such systems, rather than small differences between the two competing brands, that will drive sales. The vendors that have low power servers on the market first will benefit the most.

Intel and AMD are rapidly expanding production of their server chips. The competition between the two will become about which company can meet market demand. Making the chips is difficult and requires high yields per wafer in order to to be profitable. Intel has the edge in manufacturing technologies but AMD has made big progress in raising production yields per wafer over the past five years.

Google, the search engine company, is among the customers for such servers. It operates some of the largest data centers in the world and it is very concerned with electric power costs. It is building a huge data center in Oregon in an area where there is cheap hydroelectric power. Places where there are aluminum smelters--which require larges quantities of electric power to refine the metal--are sites that are becoming increasingly attractive to Google and others because they indicate places where there are cheap local electric power resources.