Intel is going to enter a market that was not previously considered by the chipmaker. In mid-April the company is rolling-out its new Xeon MP processors for “value” multi-processor servers.

Sources familiar with Intel’s plans said the Santa Clara, California-based chipmaker is going to slash the pricing of the Xeon MP 2.0GHz processor to $856 on the 18^th of April, 2004, to enable “value” multiprocessor servers. The Intel Xeon MP 2.0GHz processor with 1MB L3 cache now costs $1177 in business quantities.

While dual-processor servers offer pretty high performance nowadays, there is certainly a market for affordable multiprocessor servers that are capable of delivering more speed in complex applications that require a number of threads to be executed simultaneously.

Previously Intel has never moved pricing of its MP processors to below $1000 level, but today there are Opteron 800-series microprocessors some of which are priced at $698 and $873 in quantities from 1000 units. Sometime in the second quarter of the year, about 12 months after the AMD Opteron introduction, it is possible to expect chips from Sunnyvale, California-based company to gain momentum in the multiprocessor server space. Since Intel certainly does not want to lose a single Xeon MP design to AMD, the firm may try to increase competitiveness of its products by relatively low price.

Officials from Intel did not comment on the story.