Intel’s Next Wave Of Products

Nehalem

Intel (INTC) launched the Nehalem CPU microarchitecture in the fourth quarter of 2008.

Nehalem is a significant improvement over the Core 2 microprocessor. The most significant architectural improvement is the elimination of the Northbridge memory controller (the logic chip handling data moving to and from the main memory). The memory controller is instead integrated onto the CPU core, enabling faster data transfer rates and greater energy efficiency.

Testing of the chip shows significant performance improvements over existing Intel and AMD (AMD) microarchitectures. Nehalem has been constructed in a manner that would allow quad and octo-core functionality. The processor will also incorporate DDR3 memory and enable the integration of 3D graphics on the same chip.

Atom

In 2008, the company also launched the 45nm Atom processors, which are a low-power, low-performance, low-end family of products intended for Mobile Internet Devices (MIDs), smart phones and internet-centric computers called nettops and netbooks.The processors are based on x86 and x86-64 architectures, previously code-named Silverthorne and Diamondville, and built on the Intel Centrino platform.

Atom started shipping in the first quarter of 2008. The chip incorporates the Core 2 duo instruction set and enables multi-threading for a better user experience. Management stated that the initial response for the product was very good, and announced 35 new design wins at 25 customers in the MID market. Management expects the demand for Atom to be extremely high, as it will be particularly useful for “netbooks” and “nettops” that are ultra-mobile, affordable, internet-centric computing devices.

“Netbooks” are expected to attract first-time buyers in developing economies, while in developed economies, their pricing and portability are expected to help second and third unit sales per household. Although Atom is unlikely to be as efficient as some of the latest chips for desktops and servers, there is a longer-term potential for adoption in consumer electronic devices, embedded applications and thin clients.

Since the chip is specially designed for the portable market, the design excludes some features that lower the manufacturing cost. This is expected to help maintain margins even as volumes ramp up. Management stated that the Atom processor would generate margins in the 58% range. Given the enormous prospects, revenues are being broken out separately.

In Summation

These chips are a significant improvement over the previous generation platform, not just in terms of efficiency and performance, but also in terms of cost of ownership. They consume less power, require less cooling, occupy less space, improve labor productivity and lower software licensing cost.

Management stated that the company had already secured 230 designs, and the channel was sufficiently stocked to support a quick ramp. Management pulled in the timeline originally fixed for moving the Nehalem to 32nm manufacturing. The 32nm Nehalem, which will be referred to as Westmere, is now expected to ship later in the year.

For 2010, the company has planned the introduction of another microarchitecture, which is currently being referred to as Gesher.

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