Sun Microsystems Inc. is moving forward with plans to develop a processor with as many as 16 cores on one piece of silicon.

Sun said Thursday it has completed the "tapeout" stage of the coming "Rock" processor it expects to have ready for market in the second half of 2008. Tapeout refers to the final stage of the design of the chip before the specifications are sent to the manufacturer. In Sun's case, that's Texas Instruments.

"We're still on schedule," said Fadi Azhari, director of marketing for Sun's Sparc-CMT (scalable processor architecture for chip multi-threading) processor programs. Multithreading refers to the capacity of one processor to perform multiple transactions simultaneously.

Rock is designed to power high-end computer systems, said Azhari and is based on the UltraSparc T1 processor, also known as Niagara, which was introduced in November 2005. UltraSparc T1 powers Sun's T1000 and T2000 servers.

A next generation processor, UltraSparc T2, is due out in the second half of 2007.

"The trend in the industry is to the multi-core processor, but Sun has invested fairly early in this," said Jean Bozman, an industry analyst with the research firm IDC.

Other chip makers, such as Intel Corp. and Advanced Micro Devices Inc., have introduced dual-core chips, while Intel already has a quad-core chip on the market and one from AMD is expected soon. Eight-core chips are also in development, but Bozman says Sun has been on a more ambitious development path than others.

"This is where some of Sun's R&D development money went," she said, when Sun suffered a slowdown after the burst of the dot-com bubble in the early 2000s.

And while Niagara-powered servers have been deployed in "network-facing" environments, such as with telephone carriers, Rock is being positioned for use on servers in data centers, Bozman said.

Also Thursday, Sun unveiled a chip, dubbed Neptune, that operates in a 10G bit Ethernet CMT environment. It hastens movement of data from in and out of servers and across a network.

Sun also upgraded its T2000 Niagara-based servers, increasing processor speed to 1.4Ghz (gigahertz) from 1.2Ghz and doubling memory capacity to 64G bytes.

Replacing older Sun servers with Sun's T1000 servers produced demonstrable savings for Planet Out Inc., a San Francisco-based company that operates multiple Web sites for the gay and lesbian community.

"We had a very challenged operational environment," said Tom Cignarella, senior director of technical operations at Planet Out. "We had a ridiculous number of servers for the traffic we had."

Planet Out completed in August 2006 the replacement of as many as 400 outdated servers with 60 T1000s, a move which improved the efficiency of its system, reduced the space needed for its data center and cut costs spent on power consumption by 40 percent, Cignarella said.

Correction: An earlier verion of this story made an incorrect reference to the amount of cores currently available in chips that are on the market. The information has been corrected and is reflected in this version of the story.