Intel will release new chips at the Comdex trade show, its first low-power designs for super-thin servers squeezed into cabinets by the dozens, a source familiar with the plan said. The new Pentium III model is a gussied-up chip taken from the company's product line for portable computers, which share many of the same constraints as "ultradense" servers. These systems can't consume as much power or give off as much heat as ordinary CPUs because overheating causes processing errors. The systems are the first swing of a one-two punch against Transmeta, whose low-power designs caught Intel flat-footed, first in the mobile market and then in the low-power server market. Intel now is fighting back just when most server companies using Transmeta chips are on the ropes. The second punch will come early next year, when Intel moves ahead with a dual-processor design for ultralow-power servers, the source said. Transmeta's designs are just for single-processor systems. "Low power is a virtue when you want to put a hundred of these in a rack," Insight 64 analyst Nathan Brookwood said. "Intel for the last year has recognised that a lot of the processors it had developed for the mobile market also work well in the dense rack-server market." Intel didn't dispute the chip plans. "Earlier in the year, Intel committed to shipping its first ultradense, low-power products for the server segment. We're on track to do that," spokesman Seth Walker said. In March, Mike Fister, general manager of Intel's Enterprise Platform Group, said Intel would release ultralow voltage Pentium III chips made on the 130-nanometer (0.13-micron) manufacturing process, along with accompanying chipsets. Don't expect the fastest models, though: Running at lower voltage means running at lower speeds, and Intel's ultra-low voltage mobile CPUs run well-below the 1GHz threshold. Much of the difference between the ultralow voltage server and mobile chips actually is in the accompanying chipset that shuttles information between the CPU and the rest of the computer. At Comdex, Intel will release a low-power chipset that can accommodate as much as 2GB of memory and that uses error-correcting code (ECC) to ensure data isn't corrupted during transfer to memory. One thing that apparently has changed since Fister's hints in March is the cancellation of plans to release a low-power chipset that lacked ECC features. Analysts lambasted the idea. "It may have been something they could do in a hurry, but it did lack the data integrity and reliability that a server requires," Brookwood said. The Pentium III-M for laptops shares much of the same design as the Pentium III-S for servers, but power demands can be lowered because parts of the chip can be shut down when not needed. Intel has been slicing server chip prices in recent weeks. Its high-end Xeon line running at 2GHz with 256K of cache was cut 26 percent, from $615 to $455 (£318), while the 1.26GHz Pentium III-S was cut 11 percent, from $337 to $330. The new chips will be part of the Pentium III "Tualatin" line, which uses a manufacturing process with 130-nanometer features. The server chips come with 512 kilobytes of high-speed "cache" memory, twice that of the earlier 180-nanometer generation. Ultradense servers are also called "blade" models because thin server motherboards are stacked up like plates in a cabinet or books on a bookshelf. The systems are increasingly popular for lower-end server tasks such as delivering Web pages or housing protective firewalls, in part because bladed servers take up less floor space and electricity than regular servers, but also because companies are designing them to be more easily managed en masse. Hewlett-Packard, Compaq Computer, Dell and IBM all are working on bladed server designs. HP's single- and dual-processor models will be arriving in late 2001 or early 2002 , the company has said. Transmeta initially had the lead in ultradense servers, winning a place in designs from RLX Technologies, Amphus, Rebel.com and FiberCycle. RLX has been laying off staff and recently overhauled top management. Amphus switched to Intel, and FiberCycle and Rebel.com expired. "A lot of those guys were coming on stream just when the economy decided to take its downward turn," Brookwood said, but also, the power-saving difference just wasn't that big between Intel and Transmeta. See Chips Central for the latest headlines on processors and semiconductors. See the Hardware News Section for full coverage. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Chips Central forum Let the editors know what you think in the Mailroom. And read other letters.