Duncan Martell
SAN FRANCISCO: Amid the worst-ever slump in the semiconductor industry,
leading makers of microprocessors are expected to unveil striking new
power-saving technologies and increasingly robust microchips at a Silicon Valley
conference next week.
The unrelenting pace of innovation in the face of recession is expected to be
the underlying theme at this year's Microprocessor Forum next week in San Jose,
California, one of the industry's biggest trade shows.
Because microprocessors, the brains of a myriad electronic devices from PCs
to Palm handhelds to routers, take years, not months, to develop, new design
rollouts remain largely unaffected by the vagaries of the economy or spending by
corporations on information technology, industry analysts said.
"The downturn in spending has a very limited, if any, impact on
development and innovation," said longtime chip analyst Nathan Brookwood of
Insight 64.
That's partly because engineers who have been laid off in Silicon Valley and
in high-tech hot spots around the world manage to find new jobs at start-ups, or
rivals to the companies that fired them, which, in turn spurs innovation.
This, too, shall pass
On top of that, most expect the high-tech industry to snap back quickly once
overall economic growth strengthens.
"Some time in 2002 it'll probably pass and we'll be back to healthier
economic conditions where people will be buying products," Brookwood said.
Market researcher IC Insights now predicts that global semiconductor sales
will tumble 34 percent in 2001 from 2000, double the decline in the previous
worst-ever year for the chip industry, when sales declined 17 percent to $21.4
billion in 1985. Global chip sales in 2000 were $200.4 billion.
Although high-tech has had a dismal year, engineers will be for the first
time disclosing more than 30 new microprocessors, network processors designed
for routers and switches, and digital signal processors, which are widely used
in cellular phones, according to market research firm In-Stat/MDR, which is
presenting the forum.
In-Stat/MDR is a unit of Cahners Business Information, which is owned by
Dutch publishing giant Reed Elsevier Plc .
Among those presenting new processors, most of which won't be commercially
available for a year or more after this year's conference, will be Advanced
Micro Devices , ARM Holdings Plc, International Business Machines Corp.'s
microelectronics group, Intel Corp., MIPS Technologies Inc. and Sun Microsystems
Inc.
Intel, based in Santa Clara, California, will discuss details of its
forthcoming network processor based on its XScale technology that the company is
aiming at chips for cell phones and handhelds.
Intel engineers and executives will also take some of the wraps off its
upcoming Pentium 4 chip designed for laptop computers, as well as technical
details on its Banias mobile chip due out in 2003, its first processor ever
designed from the ground up for use in mobile computing devices.
It's not just performance
More broadly, Intel will also discuss its efforts, and those of the industry, to
balance power and performance when designing new products.
"Performance is important, but we need to go beyond that," said
Wilf Pinfold, technical director at Intel's microprocessor research lab.
"What are the other factors associated with overall computing experience
that are important to PC and computing users across the board."
From processors that power handheld electronic organizers to those that run
so-called Big Iron mainframe-like computers, the industry is only getting more
varied, prompting organizers to expand the conference to three-and-a-half days.
Upstart low-power chip designer Transmeta Corp. will be announcing a new,
smaller version of its Crusoe chip, analysts said. AMD, Intel's long-time and
scrappy rival, will talk about new Athlon processors for workstations and
servers, as well as discuss initial plans for its own 64-bit processors used in
heavy-duty computers run by universities, airlines, banks and the like.
Intel's Itanium chip, which cost billions to develop and was late to market,
is its firsts foray into the 64-bit market. The Itanium can crunch 64 bits of
data at one time, compared to 32 bits now crunched by its Pentium III and
Pentium 4 chips, as well as by AMD's Athlon and Duron chips.
"The overall microprocessor business has gotten so large now that it's
highly segmented," Brookwood said.
Highly segmented, yes, but at least for this year, somewhat slim on profits.
And that's why companies that can afford to, such as AMD and Intel, keep
innovating and investing. Intel is investing $11.5 billion this year on research
and development and capital spending.
"We have not pulled back on our efforts to innovate, and I think you'll
see that in some of the announcements that will be coming out," Pinfold
said. "We hope to see things turn around in the economy as soon as possible
and we'll be ready as soon as it does."
(C) Reuters Limited 2001.