Sun Microsystems and Intel announced a broad alliance Monday that will lead to Sun's re-introduction of an Intel-based product line, the companies said.

Sun will build a line of Intel servers and workstations, the first of which will be a dual-processor Xeon system, expected by the end of June. Intel, for its part, is now considering Solaris a "top tier" operating system (OS), and the company has already had engineers working on Solaris for the past few months. Eventually workstations and four-way Intel systems will also be added to Sun's portfolio, Schwartz said.

The engineering relationship means that Solaris will more quickly support new Intel processor technologies, and the two companies will work together to develop next-generation networking and virtualization technologies, as well as ways to speed up Solaris applications running on Intel machines.

"It means that we can collaborate on the feature-sets that buyers are focused on," said Intel president and chief executive Paul Otellini.

Sun had abandoned Intel several years ago, launching a line of servers with chips from Advanced Micro Devices (AMD) in late 2003. Sun also makes its own line of Sparc and UltraSparc processors.

At the time, Sun hailed AMD's 64-bit Opteron chip, and planned to use it in two-and four-way servers. But now, a return to Intel chips will allow Sun to sell its Solaris OS to a wider market, and to offer a wider range of options to data center administrators, who are increasingly replacing Unix machines that use RISC (reduced instruction set computing) processors with cheaper x86-based servers, according to Nathaniel Martinez, an IDC analyst.

The news comes as a relief to Intel, which announced another disappointing quarter of sales on 16 January, reporting 39% lower revenue than last year. Intel has endured a tumultuous year, as Otellini has tried to recover profits by laying off 10,500 workers and selling several business divisions.

Intel has upgraded its entire line of processors in recent months, making up for an era when it was criticised for making chips that used more watts and created more heat than AMD's Opteron processor. Intel's power-efficient new server chips include the "Woodcrest" dual-core Xeon 5100 and "Clovertown" quad-core Xeon 5300.

Intel's rival AMD said it looked forward to continuing to supply Sun with server chips. "From an AMD standpoint, Intel backing Solaris would expand the market, expand the x86 ecosystem, which is good for all of us," said Phil Hughes, an AMD spokesman.

AMD also sells Opteron chips to Dell, HP and IBM, but Sun has one of the biggest portfolios of server platforms on the market, he said.

AMD plans to release its first quad-core chip, the "Barcelona" version of Opteron, in mid-2007, and expects server vendors to quickly begin selling systems including the chip.