Edit

Computing

Mobile Chips Threaten High-Performance Manufacturers

At the end of 2009, Intel was shipping about 80 percent of all x86 processors–the type of chip that powers, for example, Windows-based personal computers. AMD accounted for nearly all the rest of the $28 billion market. But that market grew at a relatively modest rate of 2.5 percent last year, according to analyst firm IDC, restrained by lackluster sales of desktop computers.

Much of the real growth in microchips is coming from the explosion in mobile computing; netbooks and smart phones use both x86 and non-x86 chips. The challenges of designing chips for these devices, is rapidly redefining the industry, leaving Intel and AMD open to new competition.

In the past, the kinds of processors found in cell phones could not rival the performance of those found in personal computers. To surf multimedia websites or use a broad range of applications, you needed a laptop or desktop. Intel and AMD entrenched themselves in this market, where high barriers to entry contribute to profit margins that are higher than they are in the rest of the semiconductor industry: any potential competitor that wanted to make x86 chips for personal computers would have to sink billions into new fabs (see “The High Cost of Upholding Moore’s Law”).

But mobile processors are now powerful enough to let a user stream video from the Internet or run any of thousands of applications. Especially worrying to Intel and AMD is the use of these mobile processors in ultracheap netbooks, which are exploding in popularity and stealing market share from x86-based laptops; IDC estimates that 14.5 million netbooks were sold in 2009, 110 percent more than in 2008.

The biggest threat to Intel and AMD comes from ARM, based in Cambridge, England. Instead of selling physical processors, ARM licenses designs to manufacturers. Licensees include Qualcomm, Samsung, Freescale, and Texas Instruments; ARM-based processors are found in more than 90 percent of the world’s cell phones.

In the netbook market, chips based on ARM’s designs compete directly with Intel’s Atom processor, a stripped-down but power-efficient chip that Intel created in response to the inroads made by mobile processors. Broadly speaking, Atom processors offer more computational power than their ARM equivalents, but ARM chips draw less battery power than the Atom. However, some companies are attacking Atom’s performance edge by combining ARM’s designs with things like graphics processors for specific applications; the custom A4 chip that powers Apple’s new iPad tablet is believed to run on an ARM core. Intel is responding this summer with a more power-efficient generation of the Atom.

Uh oh–you've read all five of your free articles for this month.

Insider Online Only

$19.95/yr US PRICE

Computing

From the latest smartphones to advances in quantum computing, the hardware behind today's digital age is rapidly changing.

You've read of free articles this month.