Intel Reaches For Ever Smaller Processors

Intel is betting on its next-generation 32-nanometer processors to take the company beyond its core PC business, as people look to carry the Internet with them on smartphones and other mobile gadgets.

Intel executives on Wednesday discussed the company's future markets at Intel's Mid-Summer Technology Summit in San Francisco. In describing Intel's strategy, executives said processors and system-on-chip products built with Intel's 32-nm manufacturing process will mark a milestone for the company.

Where current 45-nm products are mostly used in PCs, servers and a relatively new category of inexpensive mini-laptops called netbooks, the upcoming 32-nm technology will mark the beginning of Intel's reach into smaller consumer electronics that represent much larger markets than PCs.

"All of our product line over the next year will be completely replaced with lots of new stuff," Sean Maloney, executive VP and chief sales and marketing officer for Intel, said of the company's plans to migrate to 32-nm products.

The next-generation architecture opens up many more uses for Intel chips because of the technology's ability to consume far less power in a smaller package, key requirements for the growing number of smartphones and future handheld devices people will use to access the Internet on the road. "The lower you are (in the size of chip circuitry) the less power you consume," Sunit Kikhi, VP of technology and manufacturing group for Intel, told the gathering of reporters and analysts.The difficulty Intel will have in manufacturing products for such a wide spectrum of devices will be in maintaining a commonality in the technology layer, while also optimizing it for devices that handle vastly different workloads. "Only time will tell," Kikhi said of Intel's chances of success.

Intel plans to start producing 32-nm processors in volume for computer makers in the fourth quarter of this year. A nanometer is a billionth of a meter, and the number refers to the size of the circuitry on the chip. By stuffing the processor with more transistors and other components, chipmakers are able to boost performance, or clock speed, of the processor while consuming less energy as the previous generation.

Intel's first 32-nm chips, codenamed Clarkdale and Arrandale, will be for mainstream desktop and laptop computers, respectively. In 2010, Intel will ship 32-nm chips for high-end desktops and servers.

For smartphones, Intel will leverage its low-power Atom processors used in netbooks today. The processors will be incorporated in many system-on-a-chip products for small Internet-enabled devices. Intel has not released a timetable for those products.

Intel is also focused on embedded devices, found in industries including manufacturing, energy, medicine and point-of-sale terminals in retail. Intel expects 15 billion devices to be connected to the embedded Internet by 2015, up from 5 billion today, Doug Davis, VP and general manager of the Embedded and Communications Group at Intel, said.While Intel has to move quickly toward supporting future Internet-enabled devices, the PC will remain its biggest revenue generator for quite a while. Therefore, Intel is closely watching the condition of the PC market, which has been hammered in the economic recession.

Maloney said the company sees a huge amount of pent-up demand among businesses for replacement PCs. "There is a massive, massive number of 3-year-old and 4-year-old computers" in the U.S. and Western Europe, Maloney said.

With "hundreds of millions" of PCs waiting to be replaced, the PC market will recover quickly, as soon as businesses decide they can no longer delay purchases, Maloney said.