Intel on Tuesday released a 900-MHz Xeon processor for servers, the last member of the chip family that will be based on the Pentium III design. The new chip contains a 2MB secondary cache, a reservoir of memory close to the processor for quick data access. Most Xeon and Pentium chips contain a secondary cache of only 256KB. The larger cache boosts performance and permits computer makers to incorporate the chip in four- and eight-processor servers that will compete against servers from Sun Microsystems and Compaq Computer's AlphaServer line. Sun will release new servers Wednesday at an event in New York. "The 900MHz Xeon is really the flagship for eight-way servers," said Tom Garrison, product marketing director at Intel. Both Intel and ServerWorks, a chipset company recently purchased by Broadcom, will also make chipsets for creating eight-processor servers. Although Intel comes out with a new desktop chip every couple of months, server and workstation chips are released on a more gradual schedule. Typically, corporate customers don't want frequent upgrades because of the time and expense involved in testing equipment before installation. As a result, Intel's last Xeon with a large cache came out about nine months ago. That chip runs at 700MHz and comes with 1MB or 2MB of secondary cache. The company will not be coming out with a 1MB cache version of the 900MHz chip. "The qualification cycles and the way corporate IT (managers) adopt the technology is more on a six-month schedule," Garrison said. "We're spacing the products out every six months." The new chip also creates a high-water mark for Pentium III technology in the Xeon line. In the second quarter, Intel will debut "Foster", a new Xeon chip based on the Pentium 4 core. Foster will run at 1.4GHz. Initial versions will be used in one- and two-processor workstations while Foster processors coming later in the year will be used in eight-processor servers. Xeon chips are based on the same basic processor core as Intel's desktop and laptop chips, but the processors contain enhancements. In quantities of 1,000, the chips cost $3,692 (about £2,510) each. The new Xeon is shipping to manufacturers, and servers will appear shortly. As previously reported, Intel warned earlier this month that sales for the first quarter will come in around $6.5bn, or 25 percent below fourth-quarter revenue of $8.7bn. If the figure proves correct, this will be the smallest quarter in terms of sales for Intel since the fourth quarter of 1997. Though dwindling PC sales sparked the slowdown, server sales have dropped off as well, the company said. See Chips Central for daily hardware news, including interactive roadmaps for AMD, Intel and Transmeta. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Chip Central forum Let the editors know what you think in the Mailroom. And read other letters.