Intel and TSMC Strategic Partnership

Intel and TSMC have struck a deal to co-manufacture Atom system-on-chips. According to PC Mag:

Intel and foundry Taiwan Semiconductor Manufacturing Co. have struck a deal to allow customers to design their own Atom system-on-a-chip processors and manufacture them at TSMC.

Intel is not outsourcing the Atom processor, as this reporter speculated on Friday. Customers who wish to buy standalone Atom chips will buy them from Intel, and Intel has not altered its Atom roadmap or production.

Intel, however, has also made the Atom a cornerstone of a system-on-a-chip strategy, such as the "Moorestown" and "Lincroft" for the mobile Internet device market. Now, an Intel customer will be able to use TSMC's process flow, tools, and intellectual property (both from TSMC and its partners) to create their own Atom-based system-on-a-chip products, which will be sold under the Intel brand.

"It's enabling Atom on TSMC,"said Anand Chandrasekher, general manager of Intel's Ultra Mobility division, during a conference call Monday morning. "It will allow TSMC to go after new market segments and allow Intel and TSMC to go after new market segments together."

This deal will inevitably be more beneficial for TSMC but it will also enable Intel to penetrate other market segments more easily and one would guess enable system-on-chip designers to leverage some of the advantages of the Intel Atom processor for their own designs. Its an interesting partnership to say the least.

PC Mag: Intel, TSMC Strike Atom Design, Foundry Deal

VIA's Nano Outperforms Intel's Atom

PC World reports at least three reviewers have found the VIA Nano low-cost processor consistently outperformed the Intel Atom processor. Both processors were designed specifically for low cost PCs which are currently selling out around the world. PC World writes:

Performance comparisons of Via Technologies' Nano processor and Intel's Atom chip conducted by several hardware-enthusiast sites Tuesday confirmed what many industry observers have long suspected: the Taiwanese processor company has produced a chip that outperforms Intel's offering for low-cost computers.

The three reviews are listed below:

• PC Perspective: VIA Nano and Intel Atom Review - Battle of the Tiny CPUs
• Hard OCP: Intel Atom vs.VIA Nano
• Hot Hardware: VIA Nano L2100 vs. Intel Atom 230: Head to Head

This news is interesting. As far as I can tell VIA have been in the low cost CPU game for a long time. I remember when I first started in the technology industry here, VIA were already launching low power processors and people were laughing them off. They were, if I recall correctly, focusing on green technologies at a time when Intel were trying to ramp up their processor speeds. It therefore doesn't surprise too much that the VIA processor currently outperforms the Atom processor. VIA have been in the game for a long time.

However, I do think first, the Atom processor will outsell the VIA processor. The Intel marketing machine is a phenomenal one and they have far more experience than VIA. Secondly, I also think in time the Intel low power processors will get better and outperform the VIA processors. Although VIA will still have a place in the market with their niche processors, I doubt they will gain a dominant position in the low power processor market.

PC World: VIA's Nano Processor Tops Intel's Atom in First Reviews

Atom Processors and Industrial PC

The Atom processor has changed the PC landscape. Low price PCs are becoming increasingly prevelant. People don't need the computing power of high-end processors so why pay for the excess capacity. The industrial PC sector is especially attuned to price. IPC customers usually buy embedded systems to be used for a single purpose e.g. being installed in a kiosk or digital signage player. They therefore don't need the full power of a normal processor. The impact the Atom processor will have in the IPC industry is uncertain at best.Will IPC profits fall? Maybe! Digitimes doesn't seem to think so:

Recent market reports that Intel's Atom standard platform has dropped below US$100 have prompted speculation that the new platform could have a possible impact on IPC (industrial PC) makers' profits. But sources at IPC makers have pointed out that although the standard platform could have an impact on the market, the affect will be limited.

The main selling point of IPCs is customization, therefore no matter how cheap the atom standard platform becomes, it will still face difficulties when competing against products developed by specialist companies who are able to add additional value to their products, the makers contended.

IPC makers said they may consider adopting the Atom standard platform for offerings to the system integrator (SI) or international trader market segments, which give priority to low-pricing, however, these buyers will face possible risks down-the-road if Intel decides on a lower than average life-cycle for the platform.

Some IPC makers are already developing Atom based platforms. It will be interesting to see how these products pan out and what the market up take is. For now I guess it is a wait and see game for the IPC industry.

Article: Low price Atom standard platform to have limited impact on IPC makers

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]

Growth of Low Cost PCs

ASUSTek has recently launched an 8.9-inch Eee PC. China Economic News (CENS) predicts shipments for these products will reach 1.3 million in Q2 and 5 million for the year. CENS notes this is ASUSTek's first low cost Intel platform. Intel however do have a competing product yet, according to CENS:

Asustek indicated that Intel, though already launching Classmate PC, a competing model against Asustek`s Eee PC, concentrates more on its sales of CPU (central processing unit) and hence has helped Asustek garner numerous governments` tender projects so far.

Digitimes notes that ASUSTek is very optimistic about these products and plan to launch a 10-inch display model later in 2008. Digitimes also notes that while ASUSTEk is aggressively pursuing this market, other players are being far more conservative.

Asustek is believed to have ordered 2.5-3 million Atom processors from Intel, while Acer has ordered around one million and may place another one million unit order depending on market demand for corresponding low-cost PCs in the later half of the year, according to industry sources. Meanwhile, Dell has been more conservative in only ordering around 300,000-500,000 Atom CPUs, while previous reports indicate Hewlett-Packard (HP) has placed an initial order for 100,000 VIA Technologies C7-M ULV CPUs to be used in its Mini-Note products, which will increase to 500,000 units by year's end. Other players including Micro-Star International (MSI) and Gigabyte Technology are even more conservative, ordering far lower volumes than their competitors, according market watchers.

Low cost PCs are also breaking into the industrial PC market with Digitimes reporting that Nexcom will also be launching a medical tablet PC based on the Atom processor.

Watching the growth of this market sector will be interesting. Currently 50% of all demand is in Europe and it will be interesting to see how the regional mix changes over the next year or so. I am personally thinking of buying one of these low cost PCs. I think they are perfect. Light, easy to carry and easy to hook-up to a big external hard drive at home. I guess the real question is why do you need to carry all the storage capacity you don't really use or access? Of course some people will prefer the high-end notebooks but these low price PCs are definitely carving out their own market sector.

Article 1: Asustek Unveils 8.9-inch Eee PC
Article 2: Intel Atom-based Eee PCs in June, 10-inch displays later in the year, says Asustek president
Article 3: Nexcom planning Atom-based industrial tablet PCs

Atom Chips from Intel

Intel will launch a new chip family branded as Atom. The chips will be used on Mobile Internet Devices (MID) and low end laptop computers. The chip has two variants, one originally branded as Silverthorne and the other branded as Diamondville. According to Intel:

"The Intel Atom processor is based on an entirely new microarchitecture designed specifically for small devices and low power, while maintaining the Intel® Core™ 2 Duo instruction set compatibility consumers are accustomed to when using a standard PC and the Internet. The design also includes support for multiple threads for better performance and increased system responsiveness. All of this on a chip that measures less than 25 mm², making it Intel's smallest and lowest power processor yet.1 Up to 11 Intel Atom processor die -- the tiny slivers of silicon packed with 47 million transistors each -- would fit in an area the size of an American penny."

(Original Press Release: Intel Announces Intel® Atom™ Brand for New Family of Low-Power Processors.)

The Wall Street Journal has a great article on Intel branding strategies (Intel Plans for Ultra-Small Chips). According to the article:

"Intel's branding moves attract unusual attention, partly because they typically come along with lucrative marketing funds for hardware companies that agree to use its logos and meet other requirements. The concept started with the chip maker's Intel Inside campaign, a fixture of advertising and marketing materials since the early 1990s."