Santa Clara (CA) – Intel told its partners that has begun phasing out the majority of its 65 nm Xeon DP processor generation to make room for 45 nm CPUs. 11 of 16 CPUs are being nixed, while others are transitioned to a new and more power-efficient stepping.

Intel expects to manufacture more 45 nm than 65 nm processors for the first time during the current quarter, so it only makes sense that the company is gradually removing 65 nm CPUs from its product list. According to a product change notification, 11 of the remaining 16 Woodcrest processors are being cut and partners have to place non-cancellable orders by October 10. Final orders will be taken until January 16, 2009, while shipments are expected to conclude by July 12, 2011.

The 65 nm dual-core Woodcrest and quad-core Clovertown processors, both of which reclaimed server processor market share from AMD’s dual-core Opteron CPU, are being replaced with the 45 nm 5400-series chips with Harpertown core.

Certain Woodcrest CPUs, including the E5130 (2.0 GHz) model will continue to be available, but transitioned to the new G-0 stepping. Intel said that “certain” models will receive “some amount of C1E power reduction” and overall energy efficiency will increase. It was unclear at the time of this writing, if Intel will adjust the 65 watt TDP rating of the chip, but we were told that unless the CPU will hit 40 watts, the company will not change its current power rating. The G-stepping also introduces Intel’s Enhanced Virtualization Technology, APIC Task Priority Register (TPR) Virtualization as well as NMI-window exiting.

The G-0 stepping Woodcrest CPUs will begin shipping on August 15.