03 June 2008

Low Cost Processors: The Competion Heats Up

On Monday Nvidia launch what they are calling the "world’s first single-chip computer." From their press release:

Today, NVIDIA Corporation (Nasdaq: NVDA) introduced the Tegra family of processors, the world’s first single-chip computer capable of the rich high definition and internet experiences we’ve come to expect from our PCs, but on small pocket type devices. NVIDIA Tegra is a tiny computer-on-a-chip, smaller than a US dime (10-cent piece), designed from the ground up to enable the “visual PC experience” on a new generation of mobile computing devices while consuming the smallest amount of power.

As many commentators have mentioned, this chip is meant to take on Intel's Atom processor. Atom is a fairly new processor launched a few months ago. Both the Tegra and Atom are aimed at Mobile Internet Devices (MID) e.g. smart phones and PDAs. However, Jack Schofield notes on the Guardian some of the problems associated with the Tegra.

The obvious drawback with the Tegra approach is that it runs Windows CE (or Windows Mobile) not Windows XP, which was written for x86-compatible chips. And if you want to run real Windows software, Tegra doesn't do the job.

More than a decade ago, Microsoft wrote Windows CE as a whole new operating system precisely because it thought x86 chips cost too much for casual buyers, and consumed too much power to offer long battery life. It thought there was a market for Mobile Companions, webpads and other devices among people who didn't actually need the laptop/desktop version of Windows, or its vast library of programs.

Microsoft turned out to be wrong, at the time. It will be interesting to see if times have changed enough to make it right.

Intel's Atom takes the opposite approach of trying to reduce the overhead of the x86 code from the past (smaller, cheaper, lower power consumption). And from Computex, it looks as though the Intel Atom is the one that has pulled in the PC manufacturers.

But this might be the first step by NVIDIA to move towards competing more directly with Intel. A few month's ago at the Intel Developer Forum in Shanghai Intel said they were trying to move the graphics core into the processor. This generated an interesting response from the NVIDIA CEO. Eflux Media notes:

NVIDIA CEO and co-founder Jen-Hsun Huang went on an Intel-related rant on Thursday at a meeting with financial analysts. The context is that Intel is trying to move the graphics processing unit (GPU) from the motherboard's chipset into the CPU, merging the two processing units on a single die for increased performance.

Last week at the Intel Developer Forum in Shanghai, Intel representatives boldly stated that discrete graphics cards will eventually become "unnecessary" for the regular consumer in the future."

Claim after claim after claim. They're just false. They cross the line of fair play," Huang said. "Here's another one. nVIDIA's gonna be dead. Because we're (Intel) sticking the graphics in the CPU and (nVIDIA) will have no place to stick it," nVIDIA's CEO said.

It certainly seems battle lines are being drawn between these companies. According to Computer World:

"There's a battle emerging here," said Nathan Brookwood, an analyst at research firm Insight 64. "This is going to be a very exciting area. It's perceived to be one with huge growth over the next few years. Everyone is going to want an in if they can pull it off."

Both NVIDIA and Intel make great products. No doubt! However, NVIDIA would be wise to think twice before enaging in a war with Intel. AMD did it over the past three years and although Intel's margins suffered significantly, they were the ones left standing. AMD are now doubting their future and are looking at becoming fabless.

However, with all the current noise being made surrounding NVIDIA and Intel, spare a thought for VIA. VIA were the first ones as I recall to see the potential for low cost processors and have had them in their catalog for quite some time. It just seems people are preferring the Intel Atom processors. To better establish their competitive position VIA have recently launched their own VIA Nano processor which many observers says will also compete with the Atom as well as some of Intel's other low power processors.

This market is heating up and competition seems to be growing. I guess we will know within a year or two who the real winners and losers are. But always remember the words of the VIA CEO who said a few years ago:

The Internet will be the biggest driving force. For Internet applications, the processor is not the main requirement -- the pipe is more important than the engine. It's like the auto industry: It used to be that people build bigger and bigger engines. But the road was only so wide, and car drivers were more limited by the road than by the engine. So people started looking at efficiency of the engine and went to smaller engines.

NVIDIA Press Release: NVIDIA Tegra: Tiny Computer Packs Massive Punch!
Guardian Article: Tegra's ARM-based chip to take on Intel for mobile market
Eflux Media: nVIDIA Boss Goes on Intel Rant
Computer World: Nvidia takes swing at Intel with new Tegra chips
VIA Press Release: VIA Nano™ Processor
Interview: Wen-chi Chen: Taiwan's Answer to Andy Grove? [PDF File]

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