Intel: 1 million Nehalems shipped, 32 nm Westmere pulled in

Santa Clara (CA) – Intel’s manufacturing engine is still pumping out stunning numbers of processors. The recent launch of the Nehalem-based Xeon 5500 servers has taken the production of the new core technology beyond 1 million commercial units. And we heard that Intel accelerates the production of 32 nm Westmere core CPUs as well.

Intel chief executive Paul Otellini unveiled the news at the company’s Q1 2009 earnings call stating that the recent Xeon 5500 launch saw more than 230 designs “with a fully-stocked distribution channel ready to support a fast ramp.” In combination with the desktop version of Nehalem, Core i7, which launched in November 2008, Intel said it shipped its one-millionth Nehalem-based microprocessor this week.

It is interesting to note that the true volume of Nehalem shipments actually happens in DP servers and not so much in desktops at this time. During the conference call with analysts, Otellini said that “the real interesting is what happens on the dual-processor server product. About half the volume that I referenced was in servers, about half of it was in the desktop machine. So that gives you some idea of the slope of this product.”

And that “slope” refers to the positioning of the technology as a premium product. Intel knows that AMD can’t touch Nehalem at this time, not in desktops and not in servers. It is not really surprising that Intel will try to cash in on this advantage as much as it can: “We see this as a premium product. It is the best product in the marketplace, so you will see us maintain a premium pricing profile for this product for a while,” Otellini said.

The executive also indicated that the introduction of 32 nm processors will happen faster than initially planned.  “We have pulled in Westmere, our fist 32-nanometer product family, and will now be shipping those products later this year,” Otellini said.  Apparently “thousands of Westmere samples” have already been delivered to more than 30 OEMs. However, he also indicated that the 32 nm chips will ship in Q4 and that an actual launch is an entirely different topic. This statement left us scratching our head a bit since we still hear that 32 nm processors will be introduced in late 2009.

And the company maintains that its 32 nm process is “is very healthy and shows great promise”.
There were two other pieces of information that somehow got lost, but are noteworthy.  First, Intel’s discrete graphics chip, Larrabee, is available as silicon and is in “debug now”. Otellini said that Intel is “marching” towards production: “The silicon will get ready, or get better, over the course of the year. The software gets finished over the course of the year. I would expect volume introduction of this product to be early next year,” he said.

And we heard that Intel is still reducing its workforce. 1400 workers were dropped from the payroll in the first quarter. The headcount is now 83,000 – 20,000 less than about three years ago and the time the company began cutting staff.