Intel turbo charges future Core processors

Intel showed off its next-generation desktop PC chips -- Intel Core i7 processors -- and energy-efficient, high-performance server products, codenamed "Nehalem-EP," that will be moved into production in Q4. Intel also said it is planning a second server derivative aimed at the expandable sever market, codenamed "Nehalem-EX," along with desktop ("Havendale" and "Lynnfield") and mobile ("Auburndale" and "Clarksfield") client versions in the second half of 2009.

By Ann Steffora Mutschler, Senior Editor -- Electronic News, 8/20/2008

In the opening keynote at the Intel Developer Forum being held this week in San Francisco, Pat Gelsinger Intel Corp senior VP and general manager of the digital enterprise group, unveiled Tuesday the company’s roadmap toward pervasive, higher performance and power efficient computing, and also detailed the company’s next-generation processor family including a new turbo mode meant to shift the processor into a higher performance gear without a heat penalty.

Intel showed off its next-generation desktop PC chips -- Intel Core i7 processors -- and energy-efficient, high-performance server products, codenamed “Nehalem-EP,” that will be moved into production in Q4. Intel also said it is planning a second server derivative aimed at the expandable sever market, codenamed “Nehalem-EX”, along with desktop (“Havendale” and “Lynnfield”) and mobile (“Auburndale” and “Clarksfield”) client versions in the second half of 2009.

“Our engineers have put together an incredible processing family here that will include a tremendous amount of new processor features all centered on delivering faster computer performance and terrific energy efficiency,” Gelsinger (pictured left) said during the keynote.

The next-generation Core architecture contains Intel’s Hyper-Threading Technology that is meant to allow up to 8-threaded performance capability on 4 cores in the initial versions and best-in-class memory bandwidth due to the QuickPath Interconnect. QuickPath connects processors, chipsets and memory together, and is meant to deliver up to three times the memory bandwidth of previous generation Core microarchitecture solutions, Intel explained.

The company also gave details on its Xeon processor X7460 that will launch in September. The processor boasts 6 cores and 16MB L3 cache for expandable servers.

Gelsinger also discussed what the company believes is the industry’s first many-core Intel Architecture (IA) based design, codenamed “Larrabee,” which is expected in 2009 or 2010, with first products based on the PC graphics market, support for DirectX and OpenGL, and able to run today’s games and programs. Intel expects Larrabee to kick start efforts to create and optimize software for the many cores that will likely power future computers.

In addition, Gelsinger gave Intel’s vision for the next wave of the Internet, that it calls the Embedded Internet. With emerging markets in the embedded computing space such as IP networking and security, video intelligence, medical, in-vehicle infotainment and home automation able to benefit from always-on Internet connectivity, this area is another growth opportunity for Intel and the high-tech industry. He predicted that there will be 15 billion devices connected to the Internet as a result of the rapid rise of the embedded internet.

Next, to demonstrate the breadth of Intel’s next-generation processors, David (Dadi) Perlmutter, executive VP and general manager of the company’s mobility group showed off its first working laptop platform codenamed “Calpella,” which is meant to redefine how users compute on-the-go, by allowing a new computing visual experience, better manageability and security, enhanced turbo mode features and evolutionary power management for notebooks. “It is all about dramatic mobile performance without compromise,” he said.

Then, on the mobile front, Perlmutter unveiled a mobile-focused 45-watt, quad-core laptop workstation – the Intel Core 2 Extreme processor – that builds on the July Centrino 2 launch for notebook PCs.

In addition, Perlmutter announced the company’s second-generation dual-core mobile processors for ultra thin and light notebook PCs, and outlined upcoming mobile platform enhancements including the Intel High-Performance SATA Solid-State Drive product line for faster system responsiveness, lower power consumption and rugged, reliable operation. Available later this year, he also disclosed Intel’s Anti-Theft Technology, which contains intelligent hardware-based detection and response mechanisms that allow IT managers or service providers to disable the platform and/or access to data in case of loss or theft.

Finally, applauding the developer community for technology innovations that contributed to unimagined advances in entertainment and business productivity during the past 40 years, Intel Chairman Craig Barrett told attendees that the impact of their work is borderless and challenged them to collaborate and use their technology expertise to inspire and empower the billions of people who have recently joined the world’s free economic system.

“Technology is a tool to address some of the world’s most pressing challenges related to health care, education, economic development and the environment. No nations or individuals are untouched by these issues. Get involved. Be part of the solution,” Barrett said who also chairs a United Nations initiative on technology in the developing world.

Along those lines, Barrett (pictured right) announced that Intel will award four $100,000 prizes in the INSPIRE•EMPOWER Challenge to the most innovative ideas for applying technology to meet unmet needs related to education, health care, economic development and the environment with ideas to be evaluated for sustainability and innovativeness of the solution.

Commenting on Day One of the forum, Lehman Brothers Semiconductor Research’s Tim Luke said, “While no major new initiatives were unveiled in Chairman's keynote and CFO roundtable, we remain encouraged by overall tone with a focus on execution and technological innovation.”

“We see encouraging trends to date for 3Q08 with new products seeing good traction (Montevina, Atom). We acknowledge limited visibility given macro uncertainty and backend loaded quarter with back-to-school sell thru a key focus of investor interest. However, as of now trends appear at least in line with our estimates of $10.3B/$0.36 and we maintain our 1-overweight rating. Updates in coming days likely to focus on Nehalem timeline in servers and Larrabee for graphics, as well as Atom roadmap,” he continued.

Luke also said Intel’s Atom should help its overall revenues and gross profit dollars while pressuring ASPs and gross margin (%), with gross margin to be lower by 11% as compared to the dual core processor. “However, Atom with low incremental sales and marketing and research investment has a positive impact on operating margins and operating income. Intel believes that Atom will have limited cannibalization impact. The company expects Atom to primarily replace lower-end Celeron (ASPs around $50) and not the upper-end high-margin Centrino (ASP>$100). Atom currently targets low-cost PCs and embedded solutions. Atom is expected to see traction in mobile internet devices (MIDs) and consumer devices as they move to 32-nm process technology and provide a single chip solution,” he noted.

Intel expects to break out Atom ASPs and revenues in its Q3 earnings call.

In the notebook sector, Luke observed that solid traction of Intel’s Montevina processor in notebooks should help margins and the company is not seeing any back-to-school impact due to the delay in Montevina launch. “Management highlighted that Intel sold more notebooks than desktops in 2Q08 and higher notebook shipments help in margins and ASPs. Notebooks have a smaller replacement cycle of 3.5 years vs. 5 years for desktop helping unit growth,” he said.

Luke also noted that the NAND market still remains challenging and said Intel management is weighing its options on timing and reduction of its exposure. “Intel's management is committed to ensuring that its IM Flash JV with Micron does not become an ongoing longer term drag of Intel's profitability. At the same time, Intel introduced SSDs for high performance SATA, Value PATA, USB and caching solutions to help improve margins for NAND segment,” he concluded.