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Intel (INTC) to Abandon Larrabee Graphic Chip

December 7, 2009 7:38 AM EST
Intel Corp. (NASDAQ: INTC) will cancel the rollout of its Larrabee graphics chip that the company had been talking about releasing publicly since 2007.

The Larrabee graphics chip was intended to Intel's attempt to move into the new semiconductor market for high-performance graphics chips, in order to be in direct competition with Nvidia Corp. (NASDAQ: NVDA) and Advanced Micro Devices Inc. (NYSE: AMD).

The Larrabee chip had been initially scheduled for release in 2009, but was later pushed back to 2010 before being cancelled.

Intel told the Wall Street Journal that the chip will not be made available conventionally, however it would be offered to aid programmers to design new applications.

Skepticism had arose that Intel would be able to cut into the market share of Nvidia and AMD, as the two companies that currently dominate the graphics chip market are creating a rapidly growing lineup of popular products. Graphics chips allow for dedicated processing performance for computer systems.

In September the company gave a demonstration of the Larrabee chip, to which analysts left unimpressed.

“The silicon and Software development are behind where we hoped to be at this point in the project,” said Intel spokesman, Nick Knupffer.

Intel will continue to create the less complex graphics chips that are inlayed into the companies CPUs, but these products are in no way a threat to the graphics card market.

Shares of Intel are currently at $20.30 before the market opens on Monday.

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