Intel, AMD Chip Businesses Continue to Evolve

CEO Paul Otellini says the industry should stop viewing Intel as solely a chip maker and come to see it as a computing business, complete with software and services. For its part, AMD, with its Vision strategy, is looking to change how consumers buy PCs; at the same time, the company sees the 2011 release of its Fusion chips as an avenue into electronic devices beyond the core PC and server markets.

Officials from Intel and Advanced Micro Devices this week once again spoke about the changing dynamics in the computer industry and their companies' efforts to change with them.

During a meeting with investors May 11, Intel CEO Paul Otellini and other executives spoke about how they expect earnings and revenues to show growth in the low double digits over the next few years as Intel continues to evolve.

"Don't think of us as a chip company anymore," Otellini told investors. "We are a computing company."

That means continuing to branch out from Intel's core PC and server chip business into the burgeoning electronics sector, from netbooks, tablets and handheld devices to televisions and cars, as well as into software and services.

On May 12, rival AMD unveiled a complete refresh of its consumer client platform, including notebooks, ultrathin laptops and desktops, focusing on the multimedia demands of consumers and building on the company's Vision strategy.

However, while much of the focus was on desktops and notebooks, AMD officials also discussed how the company's processors will play in other processor-driven devices, including televisions and MP3 players. They also pointed out the possibilities of where AMD technology will be able to go in 2011, when the company will come out with the first of its Fusion chips, which will bring together computing and graphics capabilities on a single chip.

While AMD chips will certainly be found in some netbook products in 2010, for example-Acer already has an AMD-based netbook and will roll out another one with the new AMD chips-it will be with the Fusion products that netbooks will begin to reach their potential in performance, the company said.

"We're not going to go big with millions and millions of [netbook-based] products until we debut Fusion next year," Leslie Sobon, vice president of worldwide product marketing for AMD, said during a Webcast event.

The vision being expressed by both Intel and AMD dovetails with what analysts are seeing. iSuppli analysts May 6 predicted a record year in 2010 for the semiconductor industry, fueled in large part by consumer demand for all sorts of electronics.

However, like their counterparts at Intel, AMD executives see that while their PC and server businesses will continue to grow at a healthy rate, there is real potential outside their more traditional markets.

Much of Intel's expansion will be based on its Atom processor platform, designed for everything from handheld devices like smartphones to "smart" televisions and other such appliances.

At the investors meeting, Intel showed off a netbook powered by a dual-core Atom chip and a tablet running on a new Atom processor. Mooly Eden, vice president and general manager of Intel's PC Client Group, said new Atom-based netbooks and tablets will be demonstrated at Computex, to be held June 1 to 5 in Taipei, Taiwan.

Netbooks are a place of differentiation between Intel and AMD. Intel officials said they see a healthy market for the low-cost devices, particularly in emerging markets. Otellini pointed to Mexico, where 53 percent of all PCs sold in the fourth quarter of 2009 were netbooks. Intel expects shipments of netbooks to grow 20 percent in 2010.

Tablets, Otellini said, will be "additive," a nice part of the overall PC market, but a small niche.

Traditional notebooks also should see solid growth, jumping about 22 percent in revenue each year through 2014, according to Intel.