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The semiconductor industry is set to post a revenue drop of $29 billion for this year, according to research firm Gartner.

Worldwide revenue for 2009 totaled $226 billion, down 11.4 percent from 2008, the company said in a research report published on Thursday. It marks only the sixth time in 25 years that the semiconductor industry has posted an annual decline, and is the first time it has seen a drop for two years in a row, according to Gartner.

While revenue fell sharply at the beginning of 2009, carrying on a fall prompted by the economic recession the year before, it began to rise again in the spring, according to the report.

Read more of Chip revenue falls 11.4 percent in 2009 at ZDNet UK.

Intel's 48-core Single-chip Cloud Computer (SCC) processor

(Credit: Intel)

SAN FRANCISCO--Pushing several steps farther in the multicore direction, Intel on Wednesday demonstrated a fully programmable 48-core processor it thinks will pave the way for massive data computers powerful enough to do more of what humans can.

The 1.3-billion transistor processor, called Single-chip Cloud Computer (SCC) is successor generation to the 80-core "Polaris" processor that Intel's Tera-scale research project produced in 2007. Unlike that precursor, though, the second-generation model is able to run the standard software of Intel's x86 chips such as its Pentium and Core models.

The cores themselves aren't terribly powerful--more like lower-end Atom processors than Intel's flagship Nehalem models, Intel Chief Technology Officer Justin Rattner said at a press event here. But collectively they pack a lot of power, he said, and Intel has ambitious goals in mind for the overall project.

"The machine will be capable of understanding the world around them much as humans do," Rattner said. "They will see and hear and probably speak and do a number of other things that resemble human-like capabilities, and will demand as a result very (powerful) computing capability."

The chip recovery is under way, with quarterly sales forecast to increase year-over-year for the first time in 2009, according to a report from market researcher iSuppli on Tuesday.

Revenue from chip sales is expected to rise by 10.6 percent in the fourth quarter compared to the same period in 2008. This would mark the first time this year that revenue has risen compared to the same period a year earlier, according to Dale Ford, senior vice president, market intelligence, for iSuppli.

"The seeds of the current recovery were sown in the second quarter," said Ford. At that time, manufacturers began to report positive book-to-bill ratios, indicating future revenue growth. This was followed by more sequential revenue growth in the third quarter, according to Ford.

Semiconductor inventories returned to more normal levels in the third quarter after chip suppliers shed stockpiles, he added.

Earlier this month, chip giant Intel said third-quarter revenue was down only 8 percent year-over-year, an improvement over the 15 percent and 26 percent year over year declines in the second and first quarters respectively. Intel also indicated that it expects future growth. "We're finished with the cutting phase of our efficiency effort and now in the growth phase of that efficiency effort," said Intel's chief financial officer Stacy Smith at that time.

Overall, it's been a tough year, however. Global semiconductor revenue is set to contract by 16.5 percent in 2009, following a 5.4 percent decrease in 2008.

And iSuppli has added a good dose of caution to its report. Though sequential quarterly increases in revenue will continue into 2010, sales growth will not be sufficient to lift semiconductor revenue back to pre-recessionary levels until the 2011-2012 time frame, according to Ford.

And there are troubling indicators such as the climbing U.S. unemployment rate, which reached 9.7 percent in August and is projected to exceed 10 percent at its peak, which will continue to constrain consumer spending, Ford said.

Buoyed by Netbook sales, shipments of Intel graphics chips surged and Advanced Micro Devices gained on Nvidia in the third quarter.

Third-quarter shipments of graphics processors jumped 21.2 percent over the second quarter, according to market researcher Jon Peddie Research. Graphics chips drive the images produced on PC users' screens.

A total of 119.45 million units were shipped in the third quarter, exceeding the record 111 million units that shipped in the third quarter of 2008, according to Jon Peddie, president of Jon Peddie Research. "So the market has caught up with, and exceeded, last year's highs. The crash of fall 2008 is now behind us," he said in a statement.

The third quarter exceeded a robust second quarter. "Q2 was already a great quarter clearly signaling the holidays will be robust for PCs and the industry in general," Peddie said.

AMD gained on discrete graphics chip leader Nvidia in quarter-to-quarter growth.

(Credit: Jon Peddie Research)

AMD showed the biggest jump in quarter-to-quarter growth at 30 percent, followed by Intel at 21 percent. But Intel dominates raw shipments. "Intel shipped the most parts at 63 million, over twice as many as its nearest competitor Nvidia," according to Peddie, who said Intel had a 53 percent share of the market in the third quarter. Nvidia was second with 24.9 percent, followed by AMD with 19.8 percent.

Surging Netbook shipments are behind the big Intel numbers. Integrated graphics in notebooks, which includes Netbooks, increased 27 percent over the second quarter. Integrated graphics are built into supporting Intel silicon called chipsets.

"Netbooks will remain popular but they will not have the high market share they had during the recession when they were just introduced. Rather, consumers are expected to 'buy up' in the next quarter," according to Peddie.

Fourth-quarter shipments may not be as strong as the third quarter, however. "The channel is full...That suggests that while Q4 is typically a good quarter for PCs, the quarter-to-quarter growth in Q4 may not be as robust as Q3. Graphics are a great leading indicator. The graphics go in before the PC is built or shipped," Peddie said.

Cambridge, England-based chip company ARM on Wednesday announced the development of dual-core, quad-core, and eight-core Cortex A9 processor designs, explicitly aimed at markets currently served by Intel's x86 chips and IBM's PowerPC.

"This is a huge departure from what we've done in the past", Eric Schorn, vice president of marketing for ARM's processor division, told ZDNet UK. "We really wanted to take off the handcuffs and see what could be done with performance, performance, performance."

The new designs, available in two variants optimized for low power consumption or high performance, are intended for use by companies building their own chips. ARM claims that the new processors, which can run at up to 2GHz, are up to eight times more efficient than Intel's low-power chips in terms of performance per watt, with the high-performance part running at five times the throughput of Intel's Atom chip for similar power levels.

The low-power part delivers twice the performance at a quarter the power, according to the company's published benchmarks.

"The sweet spot for most customers is dual-core," said Schorn, "but the base design can go up to quad-core and some partners are already building those. Eight way is coming. Everyone's high-end road map is putting down more cores, and we do that. We're headed in the direction of Intel's mainstream processors. We have other plans that surpass the current performance, and we'll intercept Intel in a high-margin area, not just with Atom."

The dual-core parts, which are designed to be made using fabrication company TSMC's 40-nanometer chip manufacturing process, can be licensed now with delivery of the finished designs to partners in the fourth quarter of 2009. ARM itself will be making evaluation chips available to partners and software designers in the first quarter of 2010.

To date, ARM has mostly partnered with companies making components for wireless, consumer, and automotive equipment. However, this new design will see new enterprise partners coming on board. In particular, Schorn said that the high-performance multicore ARM approach would open up parts of the market currently dominated by companies with large proprietary design teams -- "blowing the doors off that by offering freely available IP," as he put it.

"Enterprise is a key opportunity," continued Schorn. "Our existing partners are executing extremely well in their existing markets. We have a new license signed, with a number in the pipeline, and enterprise is well represented. The design is applicable to all sorts of servers, is cache-coherent so can do SMP, and will be wonderful for Linux, Apache and other parts of the enterprise stack".

Earlier this week, ARM announced that it had joined the Linux Foundation.

ARM also intends the multicore Cortex A9 design to be used in consumer equipment. "If you look at the high end of embedded systems, Netbooks and the like, there's not much innovation relative to the mobile phone area. We want to take the rate of change of mobile phone design and innovation into other areas. Consumers will see a lot more diversity at a lot faster pace," said Schorn.

The company says it gets its claimed level of performance at low power by having very finely tuned control over the different areas of the chip, with seven power zones able to turn off parts of the cache, maths, media, and general-processing areas automatically when idle.

Schorn said that he was not concerned by ARM's lack of Windows 7 compatibility. "We don't have a Big Windows announcement to make. We do have staff at Redmond, and we'll see what the future will hold. Talking about Windows is the wrong way of looking at it.

"If you look at what's happening with Web-centric, internet-oriented demographics and things like Java virtual machines, just-in-time compilers, widgets and so on, it's not architecturally dependent. Look at Samsung with Yahoo widgets in its televisions. I don't see the need for Big Windows on your television."

Rupert Goodwins of ZDNet UK reported from London.

Apple's Snow Leopard operating system, which hits the streets on Friday, has plenty of new technology--but one of its major new features will soon be available on Microsoft Windows, Linux, and other major platforms.

OpenCL, the Open Computing Language, was originally proposed by Apple to support parallel programming on GPUs. There are other GPU programming languages, such as Nvidia's CUDA (Compute Unified Device Architecture) extensions for C and the Brook stream program language developed at Stanford University and included in Advanced Micro Devices' Stream Computing software development kit, but rather than choosing one of these languages, Apple chose to create a new standard independent of the big graphics vendors.

In fact, OpenCL is even independent of Apple. One of the first things Apple did was offer to hand it over to the Khronos Group, the same independent standards organization that manages the OpenGL standard for 3D rendering.

Supporters of the OpenCL standards effort at the Khronos Group include the biggest CPU and GPU makers in the industry. Apple is also involved but not shown here.

The members of the OpenCL working group turned Apple's draft specification into the released version 1.0 spec in just six months (see Brooke Crothers' "OpenCL goes beyond Apple" from last December)--and in the process, it created what may be the best solution so far to the general problem of parallel programming.

See, OpenCL isn't just for GPUs. It was designed from the beginning to get the most out of multicore processors too. After all, if you have a multicore CPU--and you probably do--why let it go to waste? OpenCL is flexible enough to support both CPU-optimized and GPU-optimized code, and smart enough to choose the right code, depending on what hardware is available in the system to run it. Most of the competing parallel-programming languages can't do that.

OpenCL can take advantage of both task-level parallelism (running many tasks at once, whether different tasks or copies of the same task) and data-level parallelism (where a single instruction within a task is applied to multiple data items at once--also known as SIMD). Some parallel-programming languages can't do that, either.

But OpenCL's biggest advantage isn't technical in nature: it's that no other parallel-programming language will be so widely supported. The support starts with Snow Leopard but will go well beyond that. AMD and Nvidia will have OpenCL drivers for their GPUs under Windows and Linux. AMD and Intel will support OpenCL on their CPUs (including Intel's Larrabee). And AMD has already shipped its first OpenCL implementation for its Athlon and Opteron processors.

Implementations for video game consoles and DSPs (digital signal processors) are also under development. I've even heard that future releases of OpenCL may be able to work with less common hardware, such as FPGAs (field-programmable gate arrays).

We had an excellent half-day OpenCL tutorial last weekend at Hot Chips 21. There were also some great OpenCL presentations at Siggraph 2009 earlier this month; if you'd like more detailed information, that's a good place to start.

All this support for OpenCL means that it should become the first choice of academic and commercial developers who want a good cross-platform way to develop parallel code. Expect to see OpenCL used in software for audio and video processing, cryptography, medical imaging, and many other applications--including, of course, gaming.

(Disclosure: I will be writing a technical white paper for Nvidia, one of the companies covered in this story.)

The Hot Chips conference in Palo Alto, Calif this week is focusing on high-end chips for servers and scientific computers, with IBM's upcoming Power7 as a standout.

On Tuesday, IBM will give a presentation on its next-generation server chip, the Power7. IBM documentation describes the chip as having up to eight cores. A dual-chip module holds two processors for a total of 16 cores, according to IBM.

Each core has a rated performance of 32 gigaflops, providing 256 gigaflops per processor--one of the fastest chips to date based on this scientific-centric performance benchmark.

Power7 will be used in the National Center for Supercomputing Applications "Blue Waters" supercomputer, the first system of its kind to sustain one petaflop performance on a range of science and engineering applications, according to the NCSA. A petaflop is one quadrillion floating point operations per second.

Power7 "will be the first of a powerful new system design from IBM. The design includes extensive research and development in new chip technology, interconnect technology, operating systems, compiler, and programming environments," according to the NCSA.

Other chips to be described at the conference include the Sparc64 VIIIfx: Fujitsu's new 8-core processor for Peta scale computing. Sun will discuss its "next-generation multi-threaded processor Rainbow Falls" and AMD will spell out its Magny Cours processor, 12-core chip.

Intel will present a paper on its upcoming Nehalem server processor.

Intel will also discuss Moorestown, an upcoming version of the Atom processor targeted at mobile Internet devices and smartphones. Intel will also give a presentation entitled "Understanding the Intel Next Generation Microarchitectures (Nehalem and Westmere) transitioning into the Mainstream."

Helped by demand for Intel's Atom chip, microprocessor shipments shot up 10.1 percent in the second quarter of the year, according to research released Thursday by market firm IDC.

The second-quarter gain from the first quarter compared with a drop of 10.9 percent from the fourth quarter of 2008 to first quarter of 2009. However, the year-over-year comparison with 2008's second quarter showed a drop of 7 percent.

The growth from the first quarter of 2009 to the second quarter was driven largely by manufacturers replenishing their chip inventory, rather than any boost in consumer demand for PCs, said IDC.

The Atom processor also played a role. Second-quarter 2009 shipments of Atom, which has found a home in Netbook PCs, grew 24 percent over the first quarter. The chip accounted for around 25 percent of Intel's processor shipments and 8.1 percent of the company's mobile processor sales in the quarter, estimated IDC.

Overall, Intel's second-quarter PC processor shipments jumped 12.5 percent over the first quarter, while AMD's inched up 1.8 percent for the same period.

"The percentage of Intel's revenue earned in Asia/Pacific grew from 51% in 1Q09 to 55% in 2Q09," Shane Rau, director of Semiconductors: Personal Computing research at IDC, noted in a statement. "This fact, combined with the significant sequential 'snap-back' rise in Intel's overall processor shipments--particularly Atom shipments--while AMD's overall shipments were about flat, indicate that the PC processor market didn't recover in 2Q09."

Overall market revenue rose 7.9 percent from the first quarter of 2009 to the second, but second-quarter revenue was down 15.3 percent compared with the year-ago quarter.

With the Atom chip and inventory refresh driving second-quarter growth, the processor business is still weak, said IDC. And a definitive recovery is not yet in sight.

"Going forward, IDC believes that (original design manufacturers) and (original equipment manufacturers) have balanced out their inventories and so we can't rely on inventory replenishment to drive market improvements," said Rau. "Instead, we can only rely on what actual end demand really is, and that means we have to be cautious not to be over-exuberant that, say, the traditional back-to-school PC buying season will materialize into a bullish second half. It won't."

(Credit: CBS)

When people think of Saratoga Springs, they normally think of the ponies.

But now this area in upstate New York is going from horses to high-tech. Here in the small town of Malta, just south of Saratoga Springs, a new $4.2 billion semiconductor manufacturing plant has just broken ground.

"I think it's going to have a huge benefit in terms of returning to the region the status that was here long ago in manufacturing," said Doug Grose, the CEO of Global Foundries, which is a collaboration between the chipmaker Advanced Micro Devices and an Abu Dhabi investment group.

They've received more than $1 billion in tax breaks from the state of New York to build this plant, making it the most heavily subsidized public and private venture in the state's history, reports CBS News correspondent John Bentley.

With unemployment in upstate New York at the 26-year high of nearly 9 percent, building the plant was a boon for Ray Kazyaka.

A lifelong resident of the area, Kazyaka had been out of a job for three months before he came to work on the project as superintendent for construction.

"A lot of people have to jump from job to job because either they're getting laid off or it's not really what they wanted and it's not what they were trained for. With the Global Foundries project, hopefully that all will change," he said.

The company estimates it will create more than 6,000 new jobs, both at the plant and in the surrounding area, and generate almost $300 million in employee earnings.

But despite the rosy economic predictions, sinking billions into this plant is still risky. The chip market has been hit hard, down more than 20 percent from a year ago. So even though they're building it, the business may not come.

"The biggest risk is the economy, and if you think demand's going to be down for a while, this plant could have troubles," Larry Dignan, editor in chief of ZDNet.

"Clearly it's been hurt in the recession along with a lot of other businesses, but a lot of good companies and a lot of folks think this is the time to invest."

Globalfoundries is betting $4.2 billion that this is the right move.

"Times are rough, but we know this industry will come back," said Grose. "We started to see it come back, so second half '09 will be even stronger than the first half, and then, we think 2010 and 2011 (the) foundry industry will continue to grow."

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