someone (someone@somewhere.com) on 1/14/11 wrote:
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>none (none@none.com) on 1/14/11 wrote:
>---------------------------
>>? (0xe2.0x9a.0x9b@gmail.com) on 1/14/11 wrote:
>>---------------------------
>>[...]
>>>One course of action for Intel to get x86 into the tablets and phones would be:
>>>continue improving the manufacturing technology, design an architecture that can
>>>be "easily" scaled from 32 cores down to 2 cores, and completely scrap the current Atom architecture.
>>>
>>>If a CPU with 32 cores has a power consumption of 100W, then the 2-core variant
>>>will have power consumption 100W/20=5W or something. By using a lower CPU clock
>>>and power-optimized manufacturing process, Intel will possibly bring it down to
>>>1W. And that might possibly include a DX11 capable GPU with hardware video decoding.
>>
>>Intel process has been tuned for performance. They would
>>have to develop some new process to improve power.
>
>You mean like its SoC processes with low leakage transistors?
>
>> The
>>question is: can they invest that much money in order to
>>target a market where the price of a CPU is a very important
>>factor and would require them to lower their margins?
>
>Intel has developed 45 and 32 nm SoC processes and
>has said it will deliver a 22 nm SoC process at the same
>time as its high perfomance 22 nm process. Despite the
>extra investment in these SoC processes with admittedly
>next to no sales revenue to date Intel has just posted Q4
>results with record revenue, profits, and margins.

I think Intel is planning on revenues both from classic embedded, as well as stuff like tablets, cellphones, etc. The classic embedded can be quite lucrative.

>It is unlikely Intel will have to lower its percentage >gross
>margin to compete with ARM. The problem would be
>smaller absolute gross margin ($) per chip if two figure
>chips started replacing sales of three figure Intel chips
>in large quantities. But if that is going to happen it will
>happen whether Intel wants it to or not. All it can do is
>make sure that it is Intel two figure chips that are doing
>the replacing.

I'd disagree here. First, Intel is competing with ARM and ARM customers. Many of these customers have dramatically different cost profiles and optimizations. They are also probably 'leaner' operations (i.e. less marketing, etc.).

Intel needs to be in the ballpark on cost, which I think will lower their GMs relative to the average for x86. However, they are probably quite willing to do that in order to grow revenue and increase their volumes. Alternatively, they may pursue arrangements that enable them to expand revenue while still retaining higher GMs.

For instance, Intel has their partnership with Micron for flash. That structural arrangement probably mitigates the somewhat lower margins of flash and SSDs, while giving Intel upside.

David