Market for Haswell
The new chips are generating good buzz. Hewlett-Packard Company (NYSE:HPQ) has unveiled its new desktops and laptops featuring Haswell chips. Intel’s unique selling point for the chipset is its energy frugality. With these chips, Intel Corporation (NASDAQ:INTC) plans to hit ARM Holdings plc (ADR) (NASDAQ:ARMH) at its core competence. Intel has been a laggard in the emerging tablet and mobile segment; its chips are performance powerhouses, but also big energy guzzlers. This feature does not sit well with ultrabook and tablet makers, since their products need to be energy efficient.
Intel plans to release its new chips during the Computex trade show in June. The company is also tight-lipped about the specifications of its new chips, but has thrown around some tidbits to suggest that Haswell will be able to provide up to 50% more battery life. Ostensibly, Haswell consumes seven watts of energy, in comparison to the 10 watts consumed by Ivy Bridge processors.
Another area Intel plans to tackle with Haswell is gaming. MSI has already introduced a gaming laptop with Haswell chips. Apart from its energy efficiency, the new chip also offers enhanced graphic performance over Ivy Bridge. Its 22nm manufacturing process combines processing and graphics functions on a single chip.
Future Direction with Silvermont
While Haswell boasts energy efficiency, the real trump card held by Intel against mobile chip rival ARM Holdings plc (ADR) (NASDAQ:ARMH) is its Silvermont-microarchitecture-based chips. Silvermont is the advanced iteration of Intel Corporation (NASDAQ:INTC)’s Atom series, chips specially designed for mobile devices. The specifications are indeed impressive, but only time will tell how well the new system fares in the market.
I am a bit skeptical given Intel’s past history of Moorestown and Medfield. While Moorestown, owing to its complex structure and huge set of requirements, never received much support from mobile market, Medfield also failed to breach ARM chips’ dominance in the market. However, both these chips have build the solid framework for upcoming chips from Intel.
Silvermont reportedly consumes only 20% of the power required by current Atom processors. It also packs roughly three times the processing power as its predecessor. But will that be enough to corner a meaningful share in mobile market?
Dominant mobile processor players like Qualcomm rely upon ARM architecture as the foundation for their designs. While these users have to pay royalties to ARM Holdings plc (ADR) (NASDAQ:ARMH), Intel stands on more solid ground, since it integrates the entire design and manufacturing process — including the actual fabrication of the chips — in its own foundries.
Intel Corporation (NASDAQ:INTC) is looking to lead the processor market by making a speedy dash towards lower-nm manufacturing — in essence, squeezing more circuits into the same space, in distances measured in nanometers, to create smaller but more powerful chips.
Intel Corporation (NASDAQ:INTC) currently leads the industry by producing 22nm processors, but ARM Holdings plc (ADR) (NASDAQ:ARMH) is looking to intensify the competition by producing its new Cortex chips on a 20nm scale. Silvermont products are expected to be out in full force in the third and fourth quarter of the year, and the markets are counting on Intel to improve upon the poor performance of previous iterations of Atom processors.
Investment Takeaway
Intel seems to have won Samsung as a client; it’s rumored that the tablet maker’s Galaxy Tab 3 will feature an Intel chip. There are also rumors floating around that Apple Inc. (NASDAQ:AAPL) may also convert to Intel for its tablet and mobile chips. However, given Apple Inc. (NASDAQ:AAPL)’s recent commitment to its own in-house chip designs, that’s unlikely to happen in the near future.
The Baytrail chip, designed with Silvermont technology, is likely to be included in a number of Windows 8 and Android tablets, which will help Intel gain traction in the lucrative mobile market. That position will certainly be boosted by Haswell chips.
Intel Corporation (NASDAQ:INTC) stock is up more than 18% in this year so far. The company is in the mature stage, and it may not provide the same astronomical returns as newer, hotter techn companies.However, its stress on innovation and massive R&D layout ensure that the company is going to stay relevant for a long time and the stock is a good long term addition to any portfolio.
The article What Can Haswell and Silvermont Do for Intel? originally appeared on Fool.com and is written by Mitra S.
Mitra S has no position in any stocks mentioned. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple, Intel, and Qualcomm. Mitra is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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