Ten predictions for the chip market in 2008

Meanwhile, the particular strengths of GPU processing-like grinding through critical computational algorithms in mathematically demanding work is being exploited to accelerate system performance. Areas to watch include stream computing, where Nvidia and AMD will continue to go at it with competing products in 2008.

“On the mainstream client, all things Vista, such as Google Earth and PowerPoint, have become 3-D-aware and that’s just the start. You’ll see software that will take video encoding and use the GPU to bring what would be a 10-hour rendering process into real-time,” Moorhead said. “On the server-workstation side, you’re looking at real-time rendering for not just movies, but pharmaceutical firms running intense math computations.”

6 Small victories

Is this the year we finally get “the whole Internet in our pocket?” The iPhone got the biggest buzz, but slightly larger x86-based UMPCs from companies such as OQO Inc. are arguably more impressive, ounce-for-ounce. OQO’s O2 UMPC runs on a CPU from VIA, an up-and-coming maker of ultra low-voltage chips.

Apple Computer Inc. showed us that smartphones can sell like hotcakes. But to get the full Internet experience on a tiny device, a lot of work remains to be done. According to Intel CEO Paul Otellini, the hardware-from those ultra low-voltage CPUs to solid state flash drives the size of a penny-is already there. But at September’s Intel Developer Forum, Otellini said two big hurdles stand in the way of the full PC experience on a UMPC or handset. First, software developers must figure out clever ways to squeeze the large-format, graphically rich interface of the web onto the smallest of screens in user-friendly fashion. The other big challenge, Otellini said, is connectivity. On that front, Intel is putting a whole bunch of its eggs in the WiMAX basket. However, a list of currently deployed WiMAX networks around the globe shows how far we are from widespread adoption.

Intel has its first UMPC platform, the Silverthorne “system-on-a-chip,” coming out in 2008. Our panel members have questions as to whether progress on UMPC technology will live up to its hype, if a stable ecosystem of OEMs will emerge, and to what extent sales of such devices will grow.

7 Tick and tock

While AMD’s woes have put a bit of a damper on that horse race, it will still be exciting to see whether the smaller chipmaker gets its next die shrink rolling before Intel succeeds in ramping its scheduled micro-architecture reboot, code-named Nehalem-or vice-versa.

Nehalem is widely expected to be a major redesign that will bring Intel’s micro-architecture in line with AMD’s, meaning independent power supplies to individual cores and a memory controller on the CPU die. The folks at AMD believe that’s a tacit admission from the market leader that the smaller guys got it right in the first place.

“Our architecture with Barcelona and Phenom is the one Intel wants to get to,” AMD’s Moorhead said. “And we’ll ramp up 45nm in the second half of next year, so we’ll be on the same footing there. It will in some ways break Intel’s business model, because they’ll have a memory controller on there also. How will they price that?”

From Intel’s perspective, Nehalem is going to bring a lot of opportunity for system builders in the second half of this year. “It’s an opportunity for high-end products, and later on, a tier below that,” said Steve Dallman, general manager of the Worldwide Reseller Channel Organisation at Intel.

8 More and more platforms

Intel’s vPro and Centrino Pro platforms got the most channel ink in 2007, and it’s no wonder. Those platforms are designed to enable secure, dynamic remote system management below the operating system, giving vPro and Centrino Pro broad appeal to internal IT administrators and managed service providers alike.

AMD closed out its year with the release of its Spider platform, a mid-priced integrated building block for enthusiast systems that incorporates its new quad-core Phenom CPU, new graphics cards from its ATI division, its 7-series chipset and overclocking tools for hard-core gamers. Going forward, AMD will unveil its third-generation mobile platform, Puma, and a commercial client platform called Hardcastle in 2008. Meanwhile, Intel has platforms a-plenty in store for next year, including a 45nm refresh of Santa Rosa (desktops/notebooks), Montevina (fifth-generation Centrino platform set to succeed Santa Rosa), and its SOS Silverthorne (UMPCs) and Canmore (consumer electronics devices) platforms.

Nvidia, too, will be making platform plays, such as its late-2007 release of integrated graphics chipsets for lower-end Intel CPUs. Nvidia is also working on a systemwide standard called Enthusiast System Architecture. McCarron said: “Platform-wise, Nvidia is moving into the Intel chipset market. This is the year of the battle between Intel and Nvidia. Both have very good track records on execution.”

9 Whitebook wonderland

For system builders, the question is whether the growing demand for mobile PCs, particularly in custom-hungry verticals such as education and health care, justifies entering the whitebook fray in the face of intense competition from major notebook vendors.

The profitability of whitebooks will probably never match that of white boxes in their heyday, panelists said. What’s more, few in the channel will be pure-play whitebook builders. “There is a transition from desktops happening. But the whitebook will only be successful if Intel makes it successful,” Toste said. “What to watch is what Intel does in mobile strategy for the channel.”

Intel said it’s still committed to improving the channel’s ability to integrate and provide notebooks. “It won’t go to the degree of integration that they were able to in desktops, because the parts are somewhat moulded together,” Intel’s Dallman said. “[But] with the rapid changes occurring in technology, the channel can be really successful at being first to market with the latest platforms.”

10 The shift to service

Two developments will make vendors and VARs pay even more attention to managed services in the coming year, panelists said. The first is the burgeoning ecosystem of OEMs, software developers and MSPs that’s growing around Intel’s vPro and Centrino Pro platforms. Expect rival chipmakers to make their own moves in this space in 2008. The second is the realisation by the industry that today’s small businesses have IT needs that aren’t being met, and piles of untapped dollars waiting to be spent on the right service offering. For VARs adrift on the enterprise sea, SMBs look like giant, cartoon pork chops.

“The reason we’ve been successful is a perfect storm of technology coming together with vPro and other tool sets becoming so robust,” said Michael Drake, CEO of masterIT. “You’ve got the ubiquity of the Internet, so businesses need to have nonstop uptime.”

Moorhead added: “With more commodity-level notebooks, channel guys will take in a branded notebook and wrap services around that to make a profitable business.”