Hewlett-Packard and Intel designed the Itanium chip together, but HP is handing the project over

Hewlett-Packard and Intel designed the Itanium chip together, but HP is handing the project over. Palo Alto, Calif.-based HP will shift a processor design team located in Colorado to Intel, a transfer that will place control over the design of the processor family in Intel's hands, according to sources. Like IBM, NEC and others, HP will still likely design chipsets for many of its Itanium servers, but it will effectively not participate in designing the processor itself. Neither company would comment on the transaction, which is expected to be announced Thursday. An HP representative, however, did state that HP does currently participate in the design of Itanium. If anything, the deal will likely ease some tensions between Intel and its Itanium customers. As co-developer of the chip, HP has had greater input into its design than other server makers. Some have also quietly voiced concerns that HP's special status in the joint venture could give the company advantages. Going forward, HP will likely remain the server manufacturer that most promotes Itanium, but it will be on an equal footing, technologically speaking, with its competitors. The deal will also mark one more step in HP's long exit out of the processor business. HP acquired the Alpha processor family when it bought Compaq Computer in 2002. Since then, it has transferred many Alpha engineers to Intel. In August, it put out its last chip in the Alpha family.