Intel Reports Double-Digit Growth; Gives Guidance on 2010 - HotHardware
Intel Reports Double-Digit Growth; Gives Guidance on 2010

Intel Reports Double-Digit Growth; Gives Guidance on 2010

At its earnings call last week, Intel detailed its strong 2009 finish after the decidedly uncertain start of the year. The company also gave general forecast information for what it expects in the first quarter of the year and for 2010 in general, and discussed the continuing growth of Atom and its 32nm product ramp. When Intel announced its third-quarter numbers and projected Q4 results last year there was some concern that the company might be overly bullish. As it turns out, this was scarcely an issue—Intel's gross margin of 64.7 percent broke company records. PC revenue, Data Center Group, and "other" Intel Architecture revenue all rose by 10 percent, 21 percent, and 22 percent respectively; Atom and chipset revenue was up six percent respectively.

We discussed the company's plans for a Xeon refresh earlier this week, so today we'll primarily discuss what's coming in 2010 for desktops and the mobile (Atom) segments. In desktops, Intel expects Clarkdale to steadily push into the mass market at nearly all of the price points currently occupied by the aging line of Core 2 Duo processors (Core 2 Quad chips having already been mostly pre-empted by the Core i5 launch last year). Intel stated that it intends to ramp 32nm production more quickly than it ramped at 45nm, but that the speed of the shift will depend largely on consumer demand. 2009 was unusual in that it was consumers, not corporations who drove IT spending. The former is historically more fickle than the latter; IT companies of all sorts will be watching trends and fashion more closely in 2010 than they might otherwise. One final note on the 32nm shift before we turn to Atom. As process nodes have grown smaller, the cost and difficulty of moving to each successive generation has grown significantly.

As a result, a number of companies have either pushed back their leading-edge process deployments or, like TSMC, have struggled to meet the needs of their customers. Intel's 32nm ramp, in contrast, appears to be going quite well; sales of 32nm products had a 'significant' effect on ASPs (which in turn helped drive the company's record gross margin).

Atom Update

Intel's Paul Otellini demonstrating the Atom-powered LG GW900.

Intel mentioned the LG GW900 smartphone it debuted at CES, but didn't spend much time talking about what it referred to as the 'upcoming' Moorestown platform. The majority of the Atom conversation focused on netbooks, where Intel continues to do extremely well. According to the company, Atom has now gathered a total of 600 design wins with 230 customers, 93 of which are first-time Intel customers. We don't know how much those 93 new companies contribute to total netbook revenue, but the fact that 40 percent of Atom's customer base is new is still significant.

Atom's popularity shows no sign of waning, but the point of sale for the diminutive systems may be shifting towards cell phone companies or other carriers, with carrier-based models of subscription and payment. The number of total netbooks distributed by carriers as opposed to Dell or Asus grew markedly in Q4 2009; Intel expects this to continue to grow throughout the ear. Atom accounted for $1.4 billion in total sales in 2009; sales the CPU manufacturer believes are completely additive to its core businesses. Mobile sales, including low-end notebooks, have not been negatively impacted by Atom's popularity.

While there's no reason to doubt Intel's candor on the impact of Atom on its core mobile business, the company's statements are a tad disingenuous. While the new Pine Trail platform should improve battery life, the company's new LM10 Express chipset continues to lack features like digital video output or a video core with built-in support for hardware-accelerated video decoding. (Pine Trail allows for the use of third-party decoding chips, but Intel elected not to provide such support itself). This isn't to knock Pine Trail as such—if the new SoC meets your needs and improves battery life, that's great—but it's impossible to compare the feature sets of the new NM10 Express and NVIDIA's ION without realizing that Intel is keeping certain features away from Atom deliberately.

The Drill-Down...
All things considered, 2010 looks like it'll be a pretty quiet year for Intel, at least as far as competition is concerned. AMD will most likely compete against Clarkdale's CPU+GPU combination with cheap Athlon II quad-cores and its own excellent integrated GPUs, but Sunnyvale won't be in a position to even attempt to challenge Intel at the high end of the market until the Bulldozer and Bobcat architectures debut in 2011. Atom will continue to dominate the netbook space, with AMD and VIA possibly nibbling on the edges, and by the end of the year we'll supposedly see at least a few mobile phones based on 45nm Moorestown, though Intel probably won't make a concerted play for the space until the 32nm Medfield platform is available sometime in 2011.
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I don't think the earnings are surprising. It's not like the FTC is dragging them to court for anticompetitive business practices that *didn't* work.

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rofl plus who does Intel have as a competitior besides Intel really at least for this last year they have beat AMD to any punch they had by 3 months at the least and had better on tap as well.

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I gotta agree. Bulldozer is for servers and Bobcat for netbooks/mobile devices.

I don't see anything for the enthusiast gamer in AMD's line up. Simply stated, AMD will continue to exist in Intel’s shadow and at the mercy of Intel’s pricing until it magically closes a one-year gap in its manufacturing process technology. On the bright side, AMD's stock is up 400% over its 52 week low.

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Rofl; good point 3vi1, it's also not like they don't own so much of the market that there competition is limited in any case as well.

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Rofl good point 3vi1, but do you thinks they deserve it? I do even though I currently don't use them. The reason for this is because they never stop, and are for many reason where the general user is technology wise. Thats how I see it anyway, I think technology on the hardware end would be nowehere near where it is without a catalyst like them.

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Great article Joel! Larrabee is out of the picture and Intel has realized that Clarkdale will successfully coexist with their 45 nm predecessors for quite some time.

Bobcat is strictly a netbook/ultraportable core, and while 2009 made netbooks very popular, I think we'll see them phasing out by the end of this year (assuming Apple's tablet revolutionizes the market).

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That's a very good assumption on the tablet point there gibbersome. I will bet it holds dome truth as well. I don't know about the netbooks though I think there here to stay it will take at least another year for the tablet to kill it off if it does.

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Gibbersome,

AMD's K8 was designed as a server processor first, a desktop processor second. The biggest single reason K8 blew K7 (and Northwood P4) away at the time was its integrated memory controller. Adding SSE2 and improved SSE support helped K8, as did its other architectural improvements and increased cache size, but when you move to an IMC you can cut latency by as much as 50%.This improves performance *everywhere*, because the processor is literally idling half as long for data from main memory.

If AMD follows historical trends, Bulldozer *will* have a desktop presence in the consumer space. Think about it this way:

Take the original 3.4GHz Phenom II 965, with its TDP of 140W at 3.4GHz. (There's a new revision out with a TDP of 125W). Unless you've really borked things up, you can dramatically reduce that figure by cutting clockspeed, as we see from AMD's product line up. The Phenom II X4 905e is a 2.5GHz chip with the exact same number of cores and cache with a TDP of just 65W. A 27% reduction in clockspeed, in other words, cut the CPU's power consumption by more than 50% from the base stepping and 48% or so from the lower-power stepping.

Cutting the power consumption by 50% *again*, however, is much more difficult without cutting cores, and the further down you carve, the harder it gets. That's why Intel ultimately decided to design an entirely new chip when it wanted to launch products into the netbook space. Sure, it could've taken a Core 2-derived design, sliced off most of the cache, baked in some power optimizations, and shrunk the process. In fact, Intel *did* all those things when it created the CULV product line.

Atom, however, targets a still-lower space. That's why AMD needs Bobcat. It's easy to bring a server design into a desktop—much easier, comparatively speaking, than it would be to take a cell phone/netbook chip and put it in a "real" system. I've railed against the fact that Intel keeps Atom artificially compressed out of the lower end of the notebook market--and they do--but even if the sky was the limit, there'd still be a definite ceiling on just how much the Atom architecture is capable of doing.

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Thanks for the detailed explanation. I admit I was a little confused when I saw Bulldozer being billed as a server chip and the subsequent talk of 12 and 16 core Opteron "Interlagos" processors.

I dug a little deeper after reading your post and saw that AMD had announced the Zambezi desktop chips as well, featuring eight x86 processing engines with multithreading technology, two 128-bit FMAC floating point units, shared L2 &  L3 cache as well as integrated memory controller. I can see this as a response to Intel's HyperThreading, though the way they're achieving this is very different from Intel. The early comparisons between this chip and Intel will be very interesting to see.

I see what you mean with Bobcat. Currently AMD is completely out of picture when it comes to Ultra-low power processors. Besides maybe VIA's new Nano 3000 series Intel has no real competition. I am actually pretty excited about VIA's offerings since they the Nano does support HDMI, Blu-Ray video and DDR3, unlike the current Atom processors.

So I guess besides Thuban (six-core desktop chip), the roadmap for AMD looks pretty empty for 2010.

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Yeah Bulldozer is going to be a server or enthusiast cpu from the start. There core construction looks pretty promising. I don't know though really a year knocked of there product time does not seem like enough. Intel at this time has 4 or 5 CPU different series tha either compete pretty evenly with or outperform anything AMD has except maybe some Opteron to Xeon stuff. The only reason that this is because of differing things besides sheer performance (energy usage etc) on top of decent performance.

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Intel has its "tick-tock" strategy intact. Last year's Nehalem and the new microarchitecture was the tick and this year the 32nm Westmere manufacturing process ifs the tock. At CES, Intel introduced several new i5 and a couple i3 processors. All the chips come with the new integrated Intel HD graphics, which they say will be good enough for mainstream gaming and Blu-Ray video. I'm not very optimistic that both their claims will hold true.

The upper end of the Core i5 and Core i7 will still be manufactured with the 45nm process. And the kicker is that the six-core Westmere-Xeon will be here within the next couple of months, and way ahead of AMD's six-core. The cheaper 32nm manufacturing process also gives Intel a higher profit margin to operate within, while AMD is still using the older 45nm process.

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Yeah these things are very true gibbersome. I think the bulldozer 6 cores are supposed to be 32nm as well. By the time they get them release Intel will be 8 core though most likely. if they drop there 6 core Xeno's in a month or two they will probably hit retail in early summer and 8 cores will either hit late august or october/november. This is judging the way the usually drop stays the same this year.

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>> for this last year they have beat AMD to any punch

Intel's had a lot more money to throw into R&D, thanks to their business practices. :\

Hopefully AMD wisely invests the $1.25B Intel paid them to drop their lawsuits, and the FTC scares Intel back into a mode where they depend more on their tech than their strong-arm deals to compete. That will result in the best prices and most innovation from both companies.

As for who is competing with Intel - I think they better watch out for ARM. There are way more ARM processors in circulation (98%+ of phones use ARM CPUs), and if they get a foothold in the PC space (climbing up through the Android/Linux/ChromeOS netbooks) they could be real competition.

ARM designs run on less than 1/10th the power of Intel chips with similar performance - they just need to scale things up to the PC world and get in good with MS (or hope that more people move to alternative OS's).

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Don't forget VIA. Intel has competition in the low-end, ultra-mobile market.

I never expected AMD to go bankrupt, as Dell, HP, Toshiba needs an alternative to keep Intel honest. Yet AMD, still remains in Intel's shadow when it comes to manufacturing. AMD still hasn't completed the transition to the 45 nm process, while Intel is quickly shifting to the 32nm process. Remember that size equal costs, so Intel is going to be able to squeeze even more profit from their chips while AMD catches up.

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rofl yeah if AMD ever really catches up it will have to be something like the memory controller thing was.

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I like AMD a lot as well, but they just keep staying on intel's fringe! Rather than charging ahead like they use to.

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They have a lot of ground to make up, that is for sure. A lot of the past 5+ years they have been treading water and trying to stay a solvent company. Now that they are a fabless chip company, basically all of their money goes to R&D instead of paying bills.

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They've done pretty well for themselves in the graphics chip market and in the last two product cycles, they've got good value products to the consumer (the 4xxx and 5xxx series respectively). So at least in this department they have a one-up on Intel.

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There mobile GPU platforms are and have been forever the standar mobile GPU solution and the market share in that sector is huge as it is in many other sectors.

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Yup, AMD's decision to buy ATI seems to have been a great move by AMD (and probably ATI too, to get extra R&D cash inflow).

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Very true Soupstyle, I hope they make some real advances because of it. I personally would like to se another Intel killer. Can you imagine something which puts the I7 line to shame. I don't know if they will be able to do it, but I would love to see it that's for sure.

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It took them a LONG time to recoup that $1.25 Billion they gave to AMD didn't it?

The $1.25 Billion seems like a small number when you think AMD was fighting those cases for 5+ years.

The FTC case is more about Intel trying to kill Via chipsets and Nvidia onboard graphics.

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I am surprised if anyone has been surprised by this, a large amount of technical companies did positive and Intel is about the largest is it not.

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rapid1:

I am surprised if anyone has been surprised by this, a large amount of technical companies did positive and Intel is about the largest is it not.

 

I'm not too surprised considering how horribly they did last year. Most of the cost cutting measures the companies employed and the economic recovery has led to consumers buying computers again. The resurgence was led by a spike on personal computer sales, 20.7 millions were sold in Q4 2009, a 24% spike from Q4 2008. I'm guessing the affordable netbooks had a lot to do with that.

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Yeah affordable all the way around I think, of course netbooks are of course, but you can grab a some what competent laptop with a bit more oomph to it for 100 more as well.

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