Feeds

Intel CEO predicts DOOM for fab industry and competitors

We'll be top dog for years, Otellini tells investors

Boost IT visibility and business value

The semiconductor industry is at a major inflection point Intel's CEO Paul Otellini predicted today at the company's analyst day, with the increasing cost of manufacturing causing a shake-out among the biggest chip players that, he said, would only leave two or three companies at the leading edge of chip design.

Intel veteran Gordon Moore had predicted a thinning out of chip fabrication facilities once the cost of a new 200mm wafer manufacturing plant hit $1bn, but he'd been a little too early, Otellini said.

The reduction in the industry is beginning now with the cost of 300mm wafer manufacturing plants hitting $5bn he said, and the situation will accelerate with the launch of 450mm wafer fabs that would cost upwards of $10bn apiece. Such expensive facilities needed steady orders to be profitable and only a few companies, Intel included, could manage such consistent volumes - with Samsung likely to make it too.

This move would be intensified by the changes needed in designs and materials needed to build the next generation of computing chips. The move to production of Tri-gate technology has taken 10 years to develop, he said, and not many people could afford the R&D costs. Chip etchers without access to this kind of research would be forced into production of lower-spec, cheaper chips.

otellini tablet

Otellini is confident of competing with Apple on tablets

Otellini also had words of warning for ARM, Power, Sparc, or any other RISC chip and anyone else with a different architecture looking to cut into Chipzilla's markets. Intel has boosted Atom development to double Moore's Law and the latest z2460 smartphone chips were getting good reviews and would move to 22nm transistors next year, with Intel aiming to be a leader in ARM's core market. As for Windows 8 on non-Intel systems, Otellini warned that ARM is in for a rude awakening.

"ARM has a big uphill fight against what we're going to do – we have incumbency, legacy support, and the capabilities of Intel for scale and power," Otellini said. "Critically for CIOs, and also end users, is that drivers are just going to work. There will be some compatibility challenges for other architectures."

RISC processors are also in Intel's sights, with a push into the communications systems market with the latest Xeon processors. Communications vendors were moving away from proprietary RISC-based systems and Xeon was ideally situated to offer a more open architecture, Otellini claimed.

As is usual, an IT vendor is claiming that something that is pervasive, popular, and less costly is therefore open. This is not the case. The X86 architecture from Intel is precisely as open as an IBM mainframe.

Apple, too, will be addressed. Intel's forthcoming slim Ivy Bridge processors will enable Intel to offer Apple competition in the tablet space and Chipzilla is also planning a massive push around Ultrabooks to give OEMs something to compete with the MacBook Air.

All this means Intel is predicting a bright future for its sales and profits, which isn't surprising given that Otellini's audience for Thursday's meeting is investors (and the odd hack.) Despite the optimistic predictions, El Reg suspects ARM and Apple won’t be trembling in their stylish yet affordable shoes. ®

The essential guide to IT transformation

More from The Register

next story
Apple takes blade to 13-inch MacBook Pro with Retina display
Shaves price, not screen on mid-2014 model
Top Gun display for your CAR: Heads-up fighter pilot tech
Sadly Navdy kit doesn't include Sidewinder missile to blast traffic
iPhone 6 flip tip slips in Aussie's clip: Apple's 'reversible USB' leaks
New plug not compatible with official Type-C, according to fresh rumors
FEAST YOUR EYES: Samsung's Galaxy Alpha has an 'entirely new appearance'
Wow, it looks like nothing else on the market, for sure
TV transport tech, part 1: From server to sofa at the touch of a button
You won't believe how much goes into today's telly tech
YES YES YES! Apple patents mousy, pressure-sensing iVibrator
Fanbois prepare to experience the great Cupertin-O
Steve Jobs had BETTER BALLS than Atari, says Apple mouse designer
Xerox? Pff, not even in the same league as His Jobsiness
NVIDIA claims first 64-bit ARMv8 SoC for Androids
Mile-High 'Denver' Tegra K1 successor said to rival PC performance
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.