Intel confirmed  today that it won’t be shipping a graphics chip under the Larrabee project, repeating what it said back in December. Back then, Intel said that it would cancel its first chip because it wasn’t fast enough and that it would continue to invest in Larrabee as a software development platform.

In other words, it’s still dead. The folks at Nvidia and Advanced Micro Devices can continue to breathe easier. Today, Intel spokesman Bill Kircos wrote in a blog post, “We will not bring a discrete graphics product to market, at least in the short-term.” (Oh god, he had to add that ambiguous phrase at the end).

Larrabee was a graphics chip that had a novel design. It had many x86 cores, or Intel-compatible processing brains, on a single chip. Intel pitched it to game console makers, but they turned it down in part because they pulled back on plans to launch new versions of consoles.

It’s not entirely clear why Intel felt the need to make the update. Perhaps it was because Paul Otellini, chief executive of Intel, said at the company’s recent analyst meeting that Intel had as many people working on Larrabee as it did before it made the December announcement.

“In terms of Larrabee, we did not stop the project,” Otellini said. “If we made a mistake, we shouldn’t have talked about it. It still has high promise in throughput computing. In terms of general-purpose computing with small Intel Architecture cores, we still like the idea.”

But Kircos clarified the plans for participating in graphic going forward. Intel makes integrated graphics chip sets, which combine a somewhat weaker performance graphics core with a separate device known as a chip set. Intel continues to ship millions of those chips a year. It just won’t ship a stand-alone graphics chip, as AMD and Nvidia do.

Intel is also integrating graphics cores into its low-power Atom chips, which are used for low-power devices such as smartphones, tablet computers or netbooks. And it will integrate graphics cores into PC processors, including its code-named Sandy Bridge processor family coming later this year. Intel’s hope, as well as AMD’s, is that it can make that pesky little Nvidia company disappear by eliminating the need for a stand-alone graphics chip by combining graphics and processing in one chip. But that strategy hasn’t been entirely successful, thanks in no small part to the explosion of visual computing apps such as games. Those apps are so demanding they require stand-alone graphics.

Intel also said it plans to derive a business from Larrabee. This is a server product that will enable supercomputers to process parallel code more efficiently. This is what Nvidia does with its CUDA programming model, which uses graphics chips to do non-graphics tasks that have to be done all at once, or in parallel.

Now that all seems pretty clear. But Intel also left the door open, saying it continues to do graphics research and development.