New product launches are always tricky events.  This is definitely the case with new chips and new processors for computing.  Intel Corp. (NASDAQ: INTC) did confirm its new chipset offering for processors today with the great promise of reduced energy use and more output.  This may be great for technology companies, but so far it is not helping on expectations for the bottom-line for investors.

The chip, codenamed Nehalem, joined in the Xeon family today and is meant to double the processing power of existing models at the same amount of power consumption.  Intel even claims that this is the biggest jump in computing in 10-years, and will offer a jump of some 160% in processing power in virtualization.

Hewlett-Packard Co. (NYSE: HPQ) will have 10 or 11 new machines and Dell Inc. (NASDAQ: DELL) will have 5 new machines based upon the new Xeon 5500 chips.

International Business Machines Corp. (NYSE: IBM) and Sun Microsystems Inc. (NASDAQ: JAVA) will also base servers around the new chips.

All the support in the world from major server companies isn’t helping.  We have seen many other rackspace server operators and smaller companies offer support for the chips as well.  Yet here at the end of the day in a weak market, Intel shares are down just over 5% at $14.60.

Even if this new launch is being taken as a business as usual move at Intel, Advanced Micro Devices Inc. (NYSE: AMD) is down as well, by 6.5% at $3.15.  This puts the pressure on AMD even further in its restructuring attempts during a recession.

The endless doubling of processors and computing power stopped translating to the doubling of the stocks long ago.

Jon C. Ogg
March 30, 2009

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