Sun Microsystems Inc. hopes its new UltraSparc T2 processor, officially launched Tuesday, will earn it repeat business from existing telecommunications customers and attract new customers looking for a way to make their networks run faster.

The T2 chip, also known by the code name Niagara 2, features eight cores supporting 64 threads of processing capacity on a single chip, double the capacity of its Niagara 1 chip. Sun bills Niagara 2 as a "server system on a chip," having built into it a number of functions besides processing, including networking, 10Gb (gigabit) Ethernet, PCI Express I/O, faster memory access, and others.

The Niagara line features chip multithreading (CMT), a processor design that makes it possible for computing instructions to go back and forth through a processor simultaneously.

Despite all the enhancements, Sun claims the Niagara 2 uses the same 2 watts of electricity per thread to operate as the Niagara 1.

Sun sees a market for Niagara 2 beyond just servers to routers and switches on networks and in other telecommunications infrastructure, said David Yen, executive vice president of Sun's Microelectronics unit. The unit, formed in March, is tasked with developing technology not just to use in Sun's products, but to license to other companies.

"We actually are in serious conversations with several global telcos for adopting Niagara 2 in their switches and routers," said Yen, declining to be more specific.

Sun is going to gradually replace Niagara 1 with Niagara 2 in its T1000 and T2000 rack servers, he said, but it may also be used in blade servers and other products. Sun would be happy to license its chips to other server vendors, too, such as rivals Hewlett-Packard Co. and Dell Inc, but Yen acknowledged that would be "definitely a longer process." Sun chips are used in servers from Fujitsu Ltd. under a long-standing partnership between the two companies.

The more significant market opportunity for Niagara 2 is in networking equipment, said Jean Bozman, an analyst with IDC.

"These chips have been optimized to a great degree to handle network traffic. That's very valuable to other folks that would otherwise have to go and figure out how to do it for themselves," said Bozman.

Emerging technology such as Voice over Internet Protocol (VoIP), IPTV -- delivering television over computer networks -- and the Web 2.0 will all need faster networks, she said.

The IDG News Service is a Network World affiliate.