The Itanium processor may soon be facing a new threat on its low end, according to a leading processor specialist.

"There's an interesting trend just starting to emerge that could change things for the Itanium," said Nathan Brookwood, principal analyst of Insight 64.

In an interview, Brookwood said a new category of "battleship-engineered" low cost chips are emerging and are represented by startups Fabric 7 Systems and Liquid Computing Corp. He said they are positioned at the low end of the Itanium and, in spite of the $10 billion pledged last week in Itanium support, Fabric 7 and Liquid Computing could constitute a strong challenge to Intel's Itanium in systems priced around $75,000 to $200,000.

Fabric 7 said Monday that a SPECjbb2005 (Java Server) benchmark run on its Q160 enterprise server demonstrates that its x86 systems and Linux can compete in data centers against high performance computers.

"With these results we've proved that the Fabric 7 architecture enables a level of scalability and performance on x86 platforms that easily competes with more expensive, proprietary systems that have traditionally dominated the midrange and high-end of the server market," said Sharad Mehrotra, CEO and co-founder of Fabric 7, in a statement. Mehrotra said Fabric 7's machines deliver HPC performance at significantly lower prices than competing configurations.

Fabric 7 published the results of its benchmark tests on the Standard Performance Evaluation Corp. Web site