Mobile vs Desktop: Intel is Ready to Crush ARM
Alvin is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Intel (NASDAQ: INTC) and the x86 architecture have a bad reputation when it comes to power consumption. Historically, Intel chips have been very power hungry. As a result, there were doubts that Intel would ever be able to compete against the low power ARM (NASDAQ: ARMH) chips that currently dominate the smartphone and tablet markets. However, Intel blew that idea out of the water with the release of its first ever smartphone.
The Lava XOLO X900, released in India on April 23, is powered by Intel’s Medfield Atom SoC (system on chip) and runs Google Android Gingerbread. Medfield has a 1.6 GHz single core CPU and a PowerVR GPU. The benchmarks from AnandTech show that ARM has awoken the sleeping giant.
Intel has finally fixed its biggest problem: battery life. The phone’s normalized battery life is right in the middle of the pack, even outperforming some notable phones like the Motorola Droid RAZR MAXX and Samsung Galaxy SII in 3G web browsing. In terms of power, Intel lives up to its name and performs well against the HTC One X and HTC One S.
The HTC One X and HTC One S run on NVIDIA’s (NASDAQ: NVDA) Tegra 3 and Qualcomm’s Snapdragon S4, respectively. AnandTech writes,
“The x86 power myth is finally busted. While the X900 doesn't lead in battery life, it's competitive with the Galaxy S 2 and Galaxy Nexus. In terms of power efficiency, the phone is distinctly middle of the road - competitive with many of the OMAP 4 based devices on the market today. If you've been expecting the first x86 smartphone to end up at the bottom of every battery life chart, you'll be sorely disappointed.”
Intel’s X900 even holds up against the Samsung Galaxy SIII.
The scary thing for ARM and its partners is that the Lava XOLO X900, Orange San Diego (UK Intel phone), and Lenovo K800 (China Intel phone) are basically just test launches by Intel. The Medfield chips in those phones are based on old architecture and were built using Intel’s older 32nm process. In case you do not know, using a smaller process lowers power consumption and boosts performance. Intel’s Ivy Bridge processors are already on the 22nm process and use FinFET (Tri-Gate) transistors.
In addition, Intel has a big lead on Taiwan Semiconductor Manufacturing and United Microelectronics in manufacturing process. TSM and UMC are the two largest independent semiconductor foundries in the world and are used by companies like Nvidia and Qualcomm to manufacture their chips. However, TSM is still on the 28nm process and is only planning to transition to 20nm later this year. Similarly, UMC is on the 28nm process and is working with IBM to get to 20nm. Furthermore, TSM is delaying FinFET implementation until 14nm.
Meanwhile, Intel is already building 14nm fabs. The company invests huge sums of money in its fabrication facilities. Intel spent $10.8 billion in 2011 and plans to spend $12.5 billion in 2012. In contrast, TSM plans to spend $8 to $8.5 billion and UMC plans to spend $2 billion. Furthermore, Intel is planning to start pumping out 22nm “Valley View” Atoms with FinFET transistors next year. Intel is arming for war.
Meanwhile, ARM and its partners are planning their own invasion of Intel’s desktop and server markets. The war will take center stage later this year when Microsoft (NASDAQ: MSFT) launches its Windows 8 assault against Apple (NASDAQ: AAPL) iOS and Android. Along with regular Windows 8 Pro, Microsoft will also be launching a version of Windows 8, called Windows RT, designed to run on ARM processors. The Microsoft Surface tablet will come in both versions. However, ARM is at an inherent disadvantage because Windows 8 Pro is compatible with legacy Windows applications and Windows RT is not.
Looking at servers, ARM is transitioning to 64 bit processors, but its first 64 bit chips will not hit the market until 2014. Thus, ARM’s assault on the server market will have to wait until then. The unknown factor in this battle is Nvidia. Nvidia, with Project Denver, is currently developing its own ARM CPU and is looking to extend the ARM system into the PC, supercomputer, and server markets.
Basically, Intel and ARM are racing to invade each other’s markets. However, Intel has the initiative. Intel has proven that it has fixed its biggest problem: power consumption. Meanwhile, ARM’s offensive has an uphill battle against Intel’s compatibility with Windows legacy applications. Furthermore, ARM’s 64 bit processors will not hit the market until 2014. That is not to say ARM does not have a chance. ARM currently dominates the mobile device market and has a large number of licensees. ARM does not actually build any chips but licenses its designs and architecture to other companies.
For example, Apple designed the A5X, which uses a dual core ARM Cortex-A9 and powers the new iPad. Qualcomm designed Krait and Snapdragon. The ability to tweak and design ARM chips to their liking provides companies with a strong incentive to stick with ARM and support the architecture. Having Apple, Qualcomm, and Nvidia as partners is definitely a big plus for ARM. However, Intel is in position to strike first and has Windows legacy programs for protection against any ARM assault. Moreover, Intel has solved its power issues and is ready to invade the tablet and smartphone market in full force. In the end, the battle still boils down to shrinking transistors, and Intel has a decisive edge in the manufacturing process. Intel is ready to crush ARM.
Alvin owns shares of Microsoft. The Motley Fool owns shares of Apple, Google, Intel, Microsoft, and Qualcomm. Motley Fool newsletter services recommend Apple, Google, Intel, Microsoft, and NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.