Net-ward Bound

The computing world of yesterday is increasingly getting connected through the Internet and millions of other networks. In such a scenario, chip giant Intel can sustain the marketshare it has enjoyed in the processor market so far, only by expanding into everything that is touched by the Internet. The transformation of the giant–from a microprocessor manufacturer for computing devices to building block supplier for client, networking and server products, is complete. The challenge for Intel is to keep up its image of one that churns better products faster in other areas too. How is Intel preparing for this challenge?

Paranoia has constantly forced the leader to explore. As a result, not only has it succeeded in maintaining its leadership, but in growing further as well. The PC is the longest living product in the technology industry and yet, it shows no signs of aging. And Intel understands that leadership can be maintained only when it takes the silicon out of the box and into other devices. This philosophy has been strengthened by the Internet era of convergence and interconnectivity.

Like most tech companies, Intel too has been hit by the recession. Global PC sales have plunged for the first time in years. Speaking about the current recession at the Intel Developer Forum held in late February, Intel chief executive officer Craig Barrett pointed out the eight peaks and troughs the semiconductor industry has witnessed since 1973. At the IDF, Intel announced its strategy to be the leader in building blocks for computing and telecommunication products in the post-recession Internet era.

Despite the mess the Internet created in 2001, Intel is confident that the Internet will scale the next peak. As Barrett explained, "Every enabling technology has to go through the cycle that starts with irrational exuberance and experiences a turbulent period before it begins its sustained growth. And soon, the Internet too, will attain its sustained growth phase."

On several occasions at the IDF, Intel showcased how it is preparing itself and the silicon for the next peak the semiconductor industry is about to witness.

To begin with, it put to rest all speculations on Moore’s Law reaching its saturation level. "Moore’s Law will remain strong for another 25 years," declared Intel’s first chief technology officer Patrick Gelsinger. Fifteen years from now, the microprocessor spec would read–30GHz clock speed, containing two billion transistors, running a trillion instruction per second, built on 300mm wafers using 10nm technology.

Intel is aware that it cannot win customers by announcing higher speeds on smaller chips any more. As PCs increase their efficiency and take new roles, similar capabilities are being transformed into myriad devices, where Intel needs to be present. In the Internet era, the three areas where Intel will find itself offering building blocks are client, networking and servers. Gelsinger therefore points out that Moore’s law should not only extend to, but also expand into other areas. And Intel must drive silicon to take Moore’s Law into the networking and telecommunication sectors.

The increasing usage of the Internet means Intel will strengthen its participation in offering communication processors. Intel has termed Gigabit Ethernet and dual band 802.11 as post-recessionary technologies.

As market demand for better connectivity increases, Intel plans to offer products with better technologies for all stages in the future. Another area where Intel is making an impact is wireless data and processor chips. Intel’s flash memory is increasing its stronghold in cellulars and handhelds. It has tied up with Microsoft to develop reference designs for smart phones and PDAs based on Intel PCA, Microsoft Pocket PC and Smartphone 2002.

It is clear that besides Moore’s Law, the next big guiding trend for Intel in the coming years would be connectivity. All of Intel’s efforts would be to offer better connectivity capability in each product it introduces.

If Intel’s plans are to come true, soon, every single microprocessor manufactured would have radio capabilities embedded in it. Convergence takes on a new meaning when the leader decides to be present in all segments. Intel will no longer be known as the chip giant, but the giant that supplies building blocks to everything that has to do with the Net.