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Intel invades AMD niche with faster chip
Intel, the world's biggest semiconductor maker, will show off a new chip that directly controls the memory in computers, invading one of the last market niches dominated by Advanced Micro Devices.
- Bloomberg
- Published: 23:32 August 19, 2008
San Francisco: Intel, the world's biggest semiconductor maker, will show off a new chip that directly controls the memory in computers, invading one of the last market niches dominated by Advanced Micro Devices.
Intel for the first time is combining the memory and processing functions into a single chip, instead of using two.
The result is a processor that helps pull up data and perform calculations faster. Other features boost the ability to handle video and sound files, and share work among computers.
While AMD has had a memory-controlling chip on the market since 2003, new processors using the design were delayed and didn't catch on with customers, analyst David Wu said. Santa Clara, California-based Intel will have a performance lead until 2010, he said.
"We don't need to go to the Olympics to know who's won the gold medal,'' said Wu, who follows chip stocks for Global Crown Capital in San Francisco. "They've got the best microprocessor right now and will have through the end of 2009.'' He has a "neutral'' rating on Intel and doesn't own the shares.
The chip, named Core i7, may help Intel chief executive officer Paul Otellini increase sales of more-profitable processors for the servers that run corporate databases and websites. Intel's most expensive server chips sell for $3,157 each, compared with $1,499 for the costliest desktop part.
Senior vice-president Patrick Gelsinger was to demonstrate computers using the chips at the annual Intel Developer Forum in San Francisco later yesterday, a spokesman said.
More than 5,000 computer and software engineers are expected to attend the show, which runs through August 21.
AMD's server chips outperform their existing Intel rivals and will be improved by the use of a new manufacturing technique before the end of the year, said John Fruehe, who heads business development for the company's Opteron server line.
The Sunnyvale, California-based company's latest version of the chip, called Barcelona, went on sale at the end of the first quarter of this year, about a year later than planned. The latest release included a fix of a problem that occurred when the chip was first sold last year. "Once Barcelona came out below specification, slow and late, Intel went to being ahead,'' Cody Acree, a Dallas-based analyst for Stifel Nicolaus & Co.
"Barcelona was an opportunity for them to leapfrog and push back ahead. Unfortunately, Barcelona simply didn't happen.''
Microprocessors run software in computers and use memory chips to store data while they make calculations. By building the memory-controller function into the processor, AMD's chips have been able to run databases and websites faster. If the chip performs well, it could increase Intel's market share, boost profitability and help Intel's share price move back toward $30, Acree said.
Intel's stock has begun to reflect investor confidence the company will maintain its lead over AMD and weather any declines in consumer demand due to a weakening economy.
The Core i7, which will go on sale this year, is based on a chip design that Intel code-named Nehalem, after a coastal town in Oregon west of its factories outside Portland. The design will become the basis of all of its processors starting next year, the company says.
Intel controls 77 per cent of the market for PC processors, according to researcher IDC in Framingham, Massachusetts. AMD holds all of the rest except for the less than one per cent of Taiwan's Via Technologies.
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