Sun Microsystems Inc killed development of an advanced server chip it hoped would leapfrog its technology past rivals IBM and Intel Corp, the New York Times reported, citing people familiar with the matter.

Officials with Sun, the world's No. 4 maker of computer services, declined comment on the report about the abandoned chip project, which Sun has dubbed Rock.

Sun, which has agreed to sell itself to software giant Oracle Corp for about $7 billion, had invested more than five years and billions of dollars in the project, according to the newspaper. It had hoped to use the home-brewed chips in new machines, rather than ones from Japan's Fujitsu Ltd, which now run the bulk of its high-end servers.

News of the chip's demise came after Oracle Chief Executive Larry Ellison recently said he planned to boost investment in developing Sun's server chips after he closes the acquisition.

Rock had been scheduled to start shipping last year, but was delayed several times as Sun engineers discovered glitches, according to the New York Times report, which said its sources requested anonymity because they were not authorized to speak to the press.

Sun designed the chip for high-end servers, which primarily compete with machines from International Business Machines Corp and Hewlett Packard Co.

Sun shares fell 0.2 percent to close at $9.28 on the Nasdaq.

(Reporting by Jim Finkle; Editing by Andre Grenon)

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