Computer chip king Intel has committed to producing a 4-GHz processor by the end of next year as it adopts an aggressive push toward smaller, faster 90-nanometer chips that cost less for the company to make.
The official announcement of plans to hit the 4-GHz mark in 2004 might be less significant than the Santa Clara, California-based company’s quest for the right degree of acceleration to meet market demand and keep competitors such as Advanced Micro Devices on their toes.
IDC senior analyst Shane Rau said Intel hitting 4 GHz in 2004 is in line with IDC’s expectations for next year, telling TechNewsWorld that the announced goal will keep Intel on track to reach 10 GHz by the end of the decade.
In its fall analyst conference this week, Intel also indicated it is seizing on the explosion of notebook popularity with its Centrino line of mobile products. “Centrino mobile technology was certainly our big event for the year,” Intel president and COO Paul Otellini told analysts and investors.
Intel chief executive Craig Barrett told attendees that the company sees a huge opportunity in the convergence of computing and communications. “Long term, I still think this is one of the biggest growth opportunities we have,” Barrett said. “Centrino may be one of the first examples of what we can do here.”
Gartner research director Martin Reynolds told TechNewsWorld that Intel is taking advantage of the shift toward mobile devices that is being driven by better performance and low prices. Reynolds added that Intel has better profit margins in the mobile space compared with the desktop.
Otellini, who said the digital home began to become a reality in 2003, said Intel plans a fast, two-pronged approach to take advantage of newer, more efficient manufacturing processes in both Centrino and Pentium.
“We will take advantage of the scale of 90 nanometer and 300 millimeter and take that to Pentium and Centrino simultaneously,” Otellini said. “This is a very, very, very fast ramp. Our goal is to ship a 4 GHz in ’04.”
IDC’s Rau said the ramp to 90 nanometers combined with the new fabrication techniques gives Intel significant cost efficiencies and, as a result, more control over pricing.
While 4 GHz might represent a significant step up in clock speed on the processors that power computers and other devices, Gartner’s Reynolds said he views Intel’s promise as “undershooting.”
“They’ve got that in the bag,” Reynolds said. “We actually expect them to be at 5 GHz next year. By the end of next year, they should be very close to five. I think four and a half is where they’ll be.”
He noted that Intel’s pace, which puts pressure on challenger Advanced Micro Devices, must not overshoot the market or it will be too expensive of a cost for minimal return. Still, if Intel does not push the envelope, it cannot take full advantage of its leading position, Reynolds added.
Clock Speed and Cost
Rau said AMD and other Intel competitors will rely on other measures, such as relatively compact die sizes, to keep their production costs competitive.
Reynolds said AMD — which this week announced both a significant win for its Opteron processor with a Sun partnership and a new fabrication facility in Germany — is more of a nuisance than a serious competitor. Intel’s bigger challenge is to keep the market moving to its newer chips.
“We’re still several years away from any big problems in that space,” Reynolds said of Intel’s profit margins on chips. “They’re holding their margins even as prices drop. They’re holding their margins by making chips more efficiently.”