A deal between Compaq Computer, Samsung Electronics and Alpha Processor Inc. (API) worth $500m (£310m), could represent an industry backlash against Intel's efforts to dominate the high-end of the chip market, according to experts. Compaq and Samsung announced Monday a joint manufacturing and marketing venture to further the development of Alpha processors and machines. It is believed that this deal will involve Samsung spending $200m on increasing the production of Alpha chips. The deal involves:

• The possibility of API supplying low-end workstations and servers to Compaq.
• Increasing software independent support by around 400 percent.
• Doubling sales, support and marketing expenditure
• Developing Alpha technology for thin-servers, network appliances as well as telecommunications technologies
• Applying copper techniques and other advanced technologies to the Alpha processor
• Cultivating partnerships in order to develop more open source tools and increase the number of Linux Alpha applications

Mario Moralis, director of semiconductor research for IDC, believes that this could well be a reflection of Compaq's desire to maintain a competitor to Intel at the high end, while continuing to use Intel processors. "If they are investing this money, it would seem to indicate that Compaq are still very serious about Alpha technology," he says. "In the long term it is better to have variety and in the long term Intel has a stronger position because it has the resources." Compaq CEO Michael D Capellas confirms that deal underscores his company's resolve to persevere with Alpha. "We are jointly stepping up our commitment to Alpha," he says. "As the most powerful 64-bit processor, Alpha has become the technology backbone for high performance computing and e-business. Through our relationship with API and Samsung, we expect Alpha to continue its lead while expanding into new emerging markets." Vice president of publications and editorial director at Microprocessor Report, Linley Gwennap also suggests that this is Compaq's way of showing its commitment to Alpha as well as Intel technology. "They are probably already spending this much on Alpha," he says. "This is probably just a message to the industry, a way of making that investment more visible." But Alpha has had a minimal impact so far, and needs all the promotion it can get. "What Alpha needs now is customers. It hasn't really caught on and this is probably just more of a continuous effort to develop Alpha in the face of stiff competition," Gwennap says. Moralis says the deal could mean Compaq and Samsung are anticipating delays in the outlay of Intel's high-end chip technology, which could create additional demand for Alpha. "What could affect Alpha demand is a delay in Itanium chips. That's where the impact would be," Moralis says. But according to Intel, nothing could be further from the truth. A spokesman dismisses this out of hand saying, "Absolutely not. It's full steam ahead for us. We've made huge steps forward in this area and have already shipped hundreds of our development systems." What do you think? Tell the Mailroom. And read what others have said.