AI, the new battleground for chip giants
Time:2023-11-15
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Local time on October 26 after the U.S. stock market, Intel announced its third quarter earnings report.
Although Intel‘s revenue and adjusted earnings per share, are much higher than expected, but from the point of view of financial indicators, Intel‘s performance in the reporting period compared to the same period last year, the performance is poor, the main business of the revenue also declined.
In this regard, Intel also admitted that "the overall market size of PC processors is shrinking, and the company is facing strong competitive pressure in this quarter."
But what‘s even more frightening is that Intel‘s competitors are attacking its hinterland - the CPU processor market.
According to the news, NVIDIA and AMD are quietly developing CPU chips based on the Arm architecture, Apple has released its M3 series chips overnight, and Qualcomm is not lagging behind, launching the Snapdragon X Elite PC processor with a new Oryon CPU that claims to beat the i9-13980HX on a single thread.
Additionally, tech giants such as Microsoft, Glory, Lenovo, Dell and HP have all announced that they will be launching PCs with Arm architecture chips next year.
Why are all the chip giants trying to get into the PC CPU market, which seems to be a ‘sunset industry‘, when AI processors seem to be the more promising market?
Tech giants ‘rush‘ for CPU
Tech giants ‘rush‘ for CPU
For a long time, there have been two main camps of PC chips, the x86 architecture and the Arm architecture. The former is dominated by Intel and AMD, while the latter is Apple‘s domain.
But lately, there‘s been a lot of "melee" in the chip world.
Not long ago, news broke that NVIDIA and AMD, with the help of Microsoft, were developing PC CPU chips for the Windows operating system using the Arm architecture, and that the chips could be released to the market as early as 2025, directly targeting Intel‘s x86 architecture-based CPU baseboards.
Intel‘s shares fell immediately after the news was released. On the other hand, NVIDIA shares closed up 3.84 percent and AMD shares closed up 4.89 percent. While the news about NVIDIA‘s intentions to build chips has yet to be confirmed, the company, which already dominates the AI, high-performance computing, and consumer graphics card industries, reportedly does plan to expand its portfolio by incorporating Arm-based processors into client Windows PCs.
In fact, over the years, many companies, not just NVIDIA and AMD, have tried to enter the PC processor space, but have failed to shake Intel‘s ‘dominant‘ position, with perhaps only Apple really posing a ‘threat‘ to Intel.
Three years ago, Apple "abandoned" the use of up to 15 years of Intel chips, independent research and development of the Arm-based M1 chip, a break Intel‘s PC "monopoly" situation.
Moreover, Apple‘s self-developed chip has provided the Mac computer series with longer battery life and faster performance than Intel processors.
It‘s no wonder, then, that Apple‘s market share has nearly doubled in the three years since it released its own M1 chip for its Mac computers.
In response, Intel CEO Pat Gelsinger sounded the "alarm" at Intel, and he didn‘t shy away from mentioning Apple‘s then-new M1 chip in a staff meeting, saying, "In the future, we‘ll have to do so well."
Two weeks ago, Apple officially unveiled its latest M3 series chips, including the M3, M3 Pro, and M3 Max chips, and also unveiled the new MacBook Pro and new iMacs equipped with the M3 series chips, which Apple said would be twice as fast as the 24-inch iMacs equipped with the M1 chips, at a "Scary Fast" themed event.
In addition, the semiconductor giant Qualcomm, is also stepping up its entry into the PC chip market, trying to grab market share with Intel and Apple.
Not long ago during the Snapdragon Summit, Qualcomm released for Windows laptops, based on the Arm architecture of the Snapdragon X Elite chip, this chip in terms of gaming, better than Intel‘s i9, as well as Apple based on the Arm architecture of the high-end self-developed chip M2, but also can be used for AI operations, processing up to 13 billion parameters of the large language model.
Qualcomm CEO Cristiano Amon also said that laptop processors will gradually move to the Arm architecture in the future, a direct declaration of war on Intel‘s X86 architecture monopoly.
In addition, ‘tech giants‘ such as Microsoft, Glory, Lenovo, Dell and HP have also joined the ‘melee‘ by announcing the launch of computers powered by Arm architecture chips next year.
Although, so far, only Apple‘s proprietary design has made ‘substantial‘ inroads - already accounting for more than 10 percent of industry shipments - as The Motley Fool, a U.S. stock research and investment website, puts it, "If these new Arm-architecture chips are successful, even if moderately so. It would be devastating for Intel."
Pat Gelsinger, Intel‘s chief executive, called for the market to remain "calm" in the face of the "CPU melee" being waged by a number of "rivals".
Historically, ARM‘s chips haven‘t gotten much attention in the marketplace," he said. While there have been some shifts in market share in the CPU and gas pedal space over the past few quarters, the market is showing signs of normalization as we move into the fourth quarter," he said.
He added, "For the moment, whether it‘s ARM as well, or alternatives to Windows clients, they‘ve been relegated to a fairly insignificant role in the PC industry. Strategically, Intel takes all competition seriously. But, tactically, we don‘t think these challenges are that important."
Gelsinger also revealed that Intel has developed a program called ‘Four Years and Five Nodes‘, which aims to improve the chip manufacturing process so as to ‘counteract‘ its competitors.
The program includes mass production of chips using EUV extreme ultraviolet lithography, the most advanced semiconductor manufacturing technology on the market, at Fab 34 in Leixlip, Ireland, and progress has been made in the current quarter, with the prospect of catching up with TSMC‘s chip manufacturing technology by 2025.
AI, the new hope for all?
AI, the new hope for all?
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Elan Tsao