Intel's move to shelve its "Larrabee" graphics technology will cost the chip maker $400 million to $800 million annually in lost business over the next two years, money that will go to AMD and Nvidia, according to a Raymond James analyst. It also means that Intel will need to rely more on discrete graphics technology from AMD and Nvidia in the near future.
Intel's decision to spike its "Larrabee" discrete graphics chip will
be a boon to Advanced Micro Devices and Nvidia, according to an analyst.
In a research note Dec. 7 on the Intel move, Hans Mosesmann, an
analyst with Raymond James Equity Research, said the "Larrabee debacle"
will cost the giant chip maker money and leverage as the industry moves
forward into more general-purpose GPU computing.
"The strategic implications are significant as we view the world of
-computing' as moving unambiguously to the use of more and more
graphics transistors for general purpose," Mosesmann said in his
report. "Basically, the world doesn't need a quad-core or eight-core
CPU for mainstream applications, but it does appear eager to use of
late a solid dual-core CPU and a good GPU as a -co-processor' (ask
Intel's inability to bring out Larrabee will cost the company about
$400 million to $800 million a year in 2010 and 2011, or about 10 to 20
percent of the GPU market that was available to Intel, he said. Much of
that money will now go to AMD and Nvidia, he said.
It also significantly weakens Intel's position against AMD and
Nvidia in this space, Mosesmann wrote. Going forward, Intel platforms
will be more dependent on discrete graphics technology from AMD and
Nvidia, and Intel's negotiating position against Nvidia in their ongoing legal dispute
cross-licensing of the bus interface is hindered given that Intel's
future GPU offering will more closely resemble a traditional
architecture, rather than the Larrabee's x86-based design.
"Intel now has an extremely weak -integrated' graphics roadmap,"
Mosesmann wrote. "With no relevant investment in its existing and
rather ancient graphics core (GMA4500), over the next couple of years
Intel platforms will be relatively weaker vs. AMD platforms or older
Intel platforms that use Nvidia -ION' chipsets."
Intel officials on Dec. 4 said they were shelving Larrabee due to
development issues, and instead will use it as a platform for
programmers. The chip was first discussed publicly in 2007, and after
several delays, was scheduled for release in early 2010.
Several analysts said that creating a new architecture is difficult,
and that Intel's struggles shouldn't be unexpected. They also said they
expect Intel will continue to develop
its own graphics chip that will come out in the future.
The lessons learned through the Larrabee work will not only help
Intel in this effort, but also as it looks to ramp up the number of
cores in its traditional CPUs.
In the meantime, AMD-which entered the GPU business through its $5.4
billion acquisition of ATI in 2006-and Nvidia will get some running
room as they continue to push their graphics technology for mainstream
While some Intel officials have downplayed the need for CPU-GPU
co-processing capabilities, Nathan Brookwood, an analyst with Insight
64, said that demand in the HPC (high-performance computing) space is
growing and will continue to do so.