Intel confident of holding off chip rivals

Intel Corp.’s long stronghold on the processor markets appears to have come under attack of late, with the chip maker facing stiff competition from smaller players, and still recovering from its recent 1.13GHz blunder. The chip giant remains unfazed, and maintains it still has a “very healthy” market share.

Intel had some unwanted media attention in August when it was forced pull out its newly launched 1.13GHz chip, due to a technical glitch. But more glaring is the growing competition it faces from arch rival Advanced Micro Devices Inc. (AMD).

According to Mercury Research, AMD had grabbed 10 per cent of the high-end desktop processor market from Intel by the second quarter of this year – a feat once thought to be near impossible. But Intel is unconcerned.

“Our market share is still very healthy,” said Chak Wong, director of product marketing and business management, Intel Asia-Pacific, in an interview with Computerworld at the recent Intel eXchange conference in San Francisco.

The two-day event gathers key hardware and software companies to showcase product offerings and exchange developments in the e-business arena. According to Wong, competitors such as AMD, were able to snatch some market share due to the recent unexpected boom in the PC market.

In the first half of this year, growth in the PC market was strong, and accelerated over and above market forecasts, he noted. As a result, Intel was unable to produce enough on time to meet the sudden upswing in demand.

“In that environment, our competitors that could produce, were probably able to capture some market share,” Wong acknowledged. “But we still have a healthy market share, and continue to produce to meet demands across all markets.”

“We respect all our competitors,” he added. “AMD is a good competitor, and has forced us to sit up. We won’t rest on our laurels.”

But another rival, newcomer Transmeta Corp., has yet to prove its viability, he noted. The company made headlines when it unveiled its Crusoe chip, which it said was designed to significantly increase battery life by minimizing the processor’s power consumption.

Transmeta could just be “a lot of hype”, Wong said. Today, a laptop typically has two to three hours battery life, and consumes 15 watts of power, of which its processor takes up less than two watts, he explained. Wong noted that a battery’s life span depends on a number of factors including the type of battery and software drivers the notebook uses, and how much computing power the applications require.

Best-of-class mobile PCs typically has four to five hours battery life, consuming less than 10 watts, where the processor takes up less than one watt, he said. “So even if the CPU consumes zero watts, you still can’t achieve the battery life span that Transmeta claims it can,” Wong said. “So I think they will need to prove themselves – and its value proposition to the market.”

Meanwhile, Intel said the launch of its first 64-bit processor, Itanium, is right on schedule.

The company initiated its pilot production this quarter, and to date, has shipped over 30,000 Itanium chips to its customers, revealed Paul Otellini, executive vice-president and general manager, Intel Architecture Group. The new chip is currently trialling in 6,000 to 7,000 systems, most of which are servers, Otellini noted, adding that Intel’s partners have hinted at a possible commercial rollout in the first half of next year.

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