Did the Feds Just Snub Intel?

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The U.S. is building a new supercomputer and it wants Advanced Micro Devices (NYS: AMD) and NVIDIA (NAS: NVDA) to help build it. Neither Intel (NAS: INTC) , the worldwide chip leader and a Silicon Valley pioneer, nor Cray (NAS: CRAY) , whose technology is already embedded in the world's third-fastest supercomputer, is in on the project.

Surprising? Definitely.

AMD has some history handling supercomputing, but NVIDIA only recently stretched beyond graphics processing with its Tegra chips for smartphones and tablets. Here, NVIDIA's newest GPU chipsets -- known as "Fermi" -- will be combined with core AMD processors to create a system that's two to three times more energy-efficient than Japan's K supercomputer, which is also the world's fastest, The Wall Street Journal reports.

The Department of Energy has commissioned the system, called "Titan," with the goal of retaking the computing lead. We don't know if the name draws from history, but if not, there's irony to the choice. Lockheed Martin's (NYS: LMT) Titan rocket was used throughout the 1960s for the Gemini space missions that helped the U.S. win what at the time was a "space race" to the moon.

Welcome to the new space race. China has grown competitive. Japan leads now. And the U.S. government, beleaguered though it may be, doesn't like losing.

How this plays out long term is anyone's guess, but what's clear is that deep-pocketed federal agencies like the DOE see AMD and former niche supplier NVIDIA as viable alternatives for outfitting their most important computing systems. Don't be surprised if the breakthrough leads to more design wins, more contracts, and best of all, more profits.

Do you agree? Disagree? Please weigh in using the comments box below. You can also keep tabs on the comings and goings of the chip industry by adding any of these stocks to your Foolish watchlist:

At the time this article was published Fool contributor Tim Beyers is a member of theMotley Fool Rule Breakersstock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool owns shares of Intel and Lockheed Martin. Motley Fool newsletter services have recommended buying shares of NVIDIA and Intel. Motley Fool newsletter services have recommended creating a diagonal call position in Intel, as well as writing puts in NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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