Nanotech - The Circuits Blog

Rumors are a dime a dozen in Silicon Valley--and that's probably overvaluing their cumulative worth. But, on occasion, they can be fascinating, especially when they help crystallize the dynamics underlying competition between Valley heavyweights.

Recently an "Intel will buy Nvidia" theory appeared on the blog I, Cringely, written by the former InfoWorld columnist and the author of "Accidental Empires: How the Boys of Silicon Valley Make Their Millions."

The upshot of the Robert Cringely post is that the recent project cancellations and legal wrangling between the two companies (and throw in Advanced Micro Devices, too) is simply leading toward an inevitable, unstoppable merger. This, of course, supersedes older rumors about a merger. And outright statements from Intel executives that they had considered a buyout in the past.

The short version of the facts (all real events) behind the theory goes something like this. Intel cancels initial Larrabee graphics chip. That's preceded by Nvidia nixing chipsets for the newest Intel Core i series of processors, as a result of an Intel lawsuit. Intel struggles to get its (Atom) chips into smartphones, while Nvidia has some success with the Tegra chip for small devices. And then Intel's sudden inclination to settle with AMD.

All reasons, theoretically, why the two companies need each other. Other sources--some close to Intel--think it's a patently absurd notion because of the regulatory issues involved, among a dozen more reasons.

Both Intel and Nvidia declined to comment.

Intel will focus on next-generation laptop technology that combines graphics functions with the main processor, in the wake of the cancellation of its initial "Larrabee" graphics processor.

Intel's next-generation graphics due for introduction at the Consumer Electronics Show.

(Credit: Intel)

Despite the market-rattling news from Intel late on Friday--which pushed rival Nvidia's stock up more than 12 percent on Monday--Intel still remains the leader in the high-volume "integrated" graphics market.

And the world's largest chipmaker is about to up the ante in this market for low-cost graphics technology, which many consumers opt for instead of high-performance chips from Nvidia or Advanced Micro Devices's ATI unit.

Later this month, Intel will unveil the first product, codenamed "Pine Trail", that puts the graphics function directly onto the same piece of silicon as the main "CPU" processor, a major departure from current technology which puts the graphics in a separate piece of ancillary silicon called the chipset.

This will be followed quickly by a CPU-graphics combination chip for laptops dubbed "Arrandale."

Integrating the graphics function onto the CPU is a feat that AMD--despite its purchase of graphics chip giant ATI in 2006--has yet to achieve.

"This is the next logical step in further integration brought to us by Moore's Law," said Jon Peddie, president of Jon Peddie Research, which tracks the graphics chip market.

"This is where the volume of sales are," said Peddie, referring to the segment of the market that the processor targets. Arrandale is expected to be rolled out at the Consumer Electronics Show in January.

As a new feature, the chip will be able to accelerate so-called "drag-and-drop transcoding" in Windows 7. Transcoding converts, for instance, a movie on a PC to a format that makes it viewable on an iPhone or iPod. This won't be available immediately, however, Intel said Monday. It will come soon after the introduction of the processor as a "driver update."

The Arrandale chip will not support Microsoft's DirectX-11 mutlimedia acceleration technology for Windows 7. At least not right away. "It's on the roadmap," according to Intel. But this technology is not widely supported across product lines by any graphics chip supplier currently.

Intel also said Monday that it will continue development work on future standalone graphics products. "We haven't stopped investing in many-core graphics architectures," an Intel spokesperson said.

The Federal Trade Commission has talked to Nvidia as its probe continues into Intel's business practices.

As CNET reported earlier, Nvidia has complained loudly for years about Intel business practices. Last month, Intel agreed to pay Advanced Micro Devices $1.25 billion to settle a long-running antitrust case against Intel.

In addition to the AMD probe, the FTC has approached Nvidia about Intel's business practices. This time in the graphics chip market, according to an Nvidia spokesperson. The Nvidia-related probe was reported by BusinessWeek.

Intel commands about 50 percent of the graphics chip market. Though Nvidia is the world's leading supplier of "discrete," or standalone, graphics chips, it ranks a distant second in overall market share to Intel, which supplies "integrated" graphics built into the chipsets that accompany all of its processors. Mercury Research estimates the total market for graphics chips, including integrated graphics, at almost $10 billion in 2009.

In the third quarter, Intel had 53 percent of the graphics chip market, up from the 49 percent share in the same period last year, according to Jon Peddie Research, which tracks the graphics chip market. Nvidia took about 24 percent, down from the 28 percent in the third quarter of last year.

Nvidia claims that Intel's "bundling" tactics--the same tactics that AMD has cited for years and that were spelled out in a complaint filed by New York's attorney general last month--are causing it undue harm.

"Intel's tactics with Ion have been the most aggressive we've seen from a competitor," Nvidia CEO Jen Hsun Huang said in a statement provided to CNET last month, referring to Nvidia's Ion chipset that is used in laptops. Intel disputes this.

"We have scrubbed and continue to scrub our pricing practices as it relates to chipsets and processors," Intel spokesman Chuck Mulloy told CNET last month.

And in another feud with Intel, Nvidia has halted development of chipsets for Intel's new "Nehalem" processor technology (marketed as the Core i series of chips), following a complaint filed by Intel in February--which Nvidia then countered in March.

Updated on December 4 at 10:55 a.m. PST: adding comment from Nvidia.

The "smartbook" aspires to put the smartphone into the laptop. Will it be able to elevate an Apple iPhone or Motorola Droid-like experience to a larger device, or is it just more marketing mumbo-jumbo?

Two companies are hoping that the smartbook will turn out to be more than just another quickly-forgotten device sales pitch. Qualcomm and Freescale, which are both supplying key silicon technology for the devices, are pushing to make smartbooks different enough from laptops--and Netbooks--that consumers will take notice.

Qualcomm CEO Paul Jacobs holds the Lenovo smartbook, which will appear at CES in January.

(Credit: Qualcomm)

The first tangible evidence of smartbooks to come will be seen at the Consumer Electronics Show in January, where Lenovo, among others, is expected to show, if not roll out, smartbook designs.

One pesky question won't go away, however. Why go out of the way to call it a smartbook? Doesn't Netbook suffice? (And it can potentially be very confusing for consumers since both terms have "book" in them.) On one level, the nomenclature choice is simply to counter the Microsoft-Intel Netbook juggernaut: Another Netbook among dozens already on the market won't draw much attention.

But at a deeper level, the two companies are trying to make the smartbook substantively different from a Netbook. Qualcomm sees it, in essence, as a large smartphone, which leaves the outdated Windows desktop experience in the dust. "A Netbook in our view is just a cheap laptop that runs Windows. We see the smartbook cannibalizing the Netbook. ... Read more

Advanced Micro Devices stock was upgraded Thursday by Broadpoint AmTech analyst Doug Freedman, citing a solid product road map and debt restructuring efforts.

AMD was trading above $7 midday on Thursday, high above the $3.50 (approximate) lows seen back in July of this year.

Freedman said in a research note Thursday that he is upgrading AMD to "buy" from "neutral" and raising the price target to $10 from $5.80.

"Positive events...lead us to believe that AMD's risk/reward is now compelling," he said. One of the biggest positives was AMD's move on Wednesday to pay off $1 billion in debt using part of its $1.25 billion settlement income from Intel and a new $500 million bond offering. "We believe AMD's debt of $3.7B will be reduced by 25 percent," Freedman said.

And Future "Fusion" chips point toward a more competitive AMD. Fusion silicon--which combines the main CPU processor with the graphics chip or GPU--is due in 2011. "We believe Fusion (CPU+GPU) will deliver discrete-like performance on an integrated chip," Freedman said, referring to high-performance standalone "discrete" graphics processors. "Fusion will likely be a low-cost product--targeting mainstream and lower-end," according to Freedman.

Chips that go into servers are also likely set for market share gains, Freedman said. "We estimate that server share could grow from ~8 percent currently, by our own forecast, to ~12 percent by FY10 year-end," he wrote. High-end "Maranello" chips boasting as many as 12 processing cores are due in the first half of next year and 16-core processors are coming in 2011.

Graphics chips that are compatible with Windows 7 DirectX 11 technology for accelerating games and general multimedia tasks are also expected to do well, such as the company's HD 5000 series of graphics chips.

With possible action by the Federal Trade Commission looming, an unidentified Dell executive is cited prominently in legal documents as a person who might exonerate Intel, or at least mitigate the severity of the charges leveled against it for alleged antitrust behavior. So, what is known about this Dell mystery man?

This week the Dell executive, referred to as "Mr. A," was cited throughout the European Union ombudsman's "decision" on on a complaint filed by Intel about the European Commission's ruling against the chipmaker. Ombudsman P. Nikiforos Diamandouros' November 18 decision found "maladministration" on the part of the Commission because of its failure to make a "proper note" of a meeting with Dell--represented most prominently by Mr. A in the the ombudsman's decision.

Diamandouros has been the The European Union's ombudsman since April of 2003.

Most importantly, Mr. A is brought up by Intel as a person who has made exculpatory statements--and therefore could refute allegations such as those made about Intel and Dell in New York Attorney General Andrew Cuomo's complaint against the chipmaker.

And who is Mr. A? He was "a senior Dell executive" and the person "responsible for Dell's relationship with Intel," according to the ombudsman's published statement.

What else is known about Mr. A? Intel asserts in its complaint to the Commission--which the ombudsman responded to in its decision--that "Mr. A's FTC [Federal Trade Commission] testimony exonerates Intel and contradicts the allegations contained in the statement of objections concerning Dell's relationship with Intel."

And Intel has had more to say about this person. "Mr. A again gave sworn testimony confirming that the key points made in his 2003 FTC testimony, to the effect that Dell did not have an exclusive relationship with Intel and that Intel did not 'threaten' or 'punish' Dell for considering a dual-source [Intel and AMD] strategy."

Also in the ombudsman's decision--which refers to Intel as the complainant: "It is clear from these events that the Commission sought to conceal and suppress exculpatory evidence. Also in the complainant's view, this misconduct (and the failure to make a complete note of the meeting which would have eliminated any debate as to what Mr. A said) constitutes a serious act of maladministration."

Intel spokesman Chuck Mulloy said Thursday that Intel continues to talk to the FTC. "Yes we are talking. We are continuing to answer their questions concerning our business practices and now we are also explaining the settlement we just completed with AMD [Advanced Micro Devices]," Mulloy said.

Advanced Micro Devices is laying claim to the world's fastest graphics card at it continues an assault on Nvidia at the high-end of the graphics chip market.

HD 5970 packs two fast graphics chips

(Credit: Advanced Micro Devices)

As teased last week by AMD senior vice president Rick Bergman at a financial analyst meeting, the "Hemlock" graphics card--now officially called the ATI Radeon HD 5970--is AMD's top-of-the-line graphics product.

"It's in production. You'll be able to buy it at e-tailers around the world...Five Teraflops out of this baby," Bergman said last week. A teraflop is a trillion floating point operations per second, a key indicator of graphics performance.

Review site Tom's Hardware called it the "fastest discrete (standalone) card in the world."

The card integrates two graphics processing units (GPUs) for a total of 4.3 billion transistors. It also boasts 3,200 stream processing units and 160 texture units--tiny individual processors for accelerating graphics. And it supports Microsoft's DirectX 11 for speeding up graphics in Windows 7.

The 5970 will ship in Area-51 ALX and Aurora desktops from Dell's Alienware unit and allow "massive overclocking," according to AMD. Overclocking allows users to ratchet up chip speeds beyond the card's specified rating. "The unrivaled overclocking capabilities of the ATI Radeon HD 5970 are enabled by the unique design of the card, which features advanced fan and vapor chamber technologies and a fully vented exhaust to keep the card cool and ensure overclocking headroom using ATI Overdrive technology," AMD said in a statement.

A maximum resolution of 7680x1600 is achieved by driving up to up to three displays at once.

AMD cited games that will benefit from the card such as Electronic Art's Phenomic's BattleForge, S.T.A.L.K.E.R.: Call of Pripyat (GSC Game World), Battlefield Bad Company 2 (EA Dice), DiRT 2 (Codemasters), Aliens vs. Predator (Rebellion), and the update to The Lord of the Rings Online (Turbine).

Though prices will vary, some retailers are currently listing the price at $599.

I'm going to break from the well-established tradition of comparing Netbooks to notebooks. This time my yardstick is going to be the smartphone. And no better yardstick than the Apple iPhone.

Verizon is selling Netbooks as kind of an upscale smartphone

(Credit: Verizon)

This post updates a year-old piece (which, by the way, at least one writer took exception to).

As the holiday-shopping season approaches, many consumers face an ostensible choice between an inexpensive Netbook or more expensive notebook. I personally face that choice (or, at least, I thought I did).

Let me state up front that though I have used Netbooks on a temporary basis, I have never owned one.

I (now) believe that Netbook comparisons to mainstream laptops (which will always disappoint because Netbooks are slower, screens smaller, keyboards more cramped--and this list of comparative shortcomings is long) is really the wrong way to look at it. Let me illustrate.

I recently interviewed the chief technology officer for a large school district in Louisiana that had purchased a lot of Netbooks. And I asked what I thought was the most pertinent question: weren't performance and screen size a concern? She quickly pointed out that my perspective was all wrong.

In short, students in K through 12 are accustomed to iPhone-size screens and performance. So moving to a Netbook is a big step up. From this perspective, the screens are large, the keyboards expansive, and the performance more than adequate.

This suddenly made a lot of sense to me because of my personal experience. Take the iPhone 3GS (or Motorola Droid or BlackBerry Storm, take your pick ). To state the obvious, in many respects, this is a personal computer platform for e-mail, texting, Web surfing, music, navigation, YouTube, and the list goes on.

In other words, the iPhone is for consuming data and media as well as light production. Like the Netbook. But the Netbook, obviously, takes this to the next level. It adds a keyboard and a larger screen, which also makes it potentially a better production platform. So, it's an iPhone Plus, if you will.

And here's the real proof in the pudding. Where do you see Netbooks being sold these days (think Nokia Booklet)? At phone carriers, like Verizon. The last time I visited a Verizon store, it had 3G Netbooks prominently displayed right next to the Motorola Droid.

The point seems obvious to me now. Want to be more productive? Step up to a Netbook. And this follows the same logic of the CTO at the Louisiana school district. And upcoming tablets and media pads from Apple and others will also be marketed as a high-end iPhone-like device, in my opinion.

So, in the next month or so when I try to sort out which Netbook to buy (This CNET review says the HP Mini 5101 is one of the best Netbooks on the market now), I'll be shopping for an upscale smartphone not a stripped-down notebook.

NOTE: I'm not suggesting that anyone replace their iPhone with a Netbook. My point is that a Netbook can be used as an inexpensive adjunct to an iPhone or Droid for people who need to be more productive than an iPhone (or Droid) would allow.

Advanced Micro Devices is not the only large Intel competitor to rail against Intel's alleged strong-arm tactics.

Nvidia has also complained loudly for years about Intel business practices in the graphics chip market, where Intel commands about 50 percent of the market.

Nvidia is the world's leading supplier of "discrete," or standalone, graphics chips but takes a distant second place in overall market share to Intel, which supplies "integrated" graphics built into the chipsets that accompany all of its processors. Mercury Research estimates the total market for graphics chips, including integrated graphics, at almost $10 billion in 2009.

In the third quarter, Intel had 53 percent of the graphics chip market, up from the 49 percent share in the same period last year, according to Jon Peddie Research, which tracks the graphics chip market. Nvidia took about 24 percent, down from the 28 percent in the third quarter of last year.

These figures get even more lopsided for Intel when the market is segmented into integrated graphics only. "Put your seatbelt on. They've got 80 percent of the notebook integrated market," said Jon Peddie, president of Jon Peddie Research. Though this is a much smaller and more segmented market than overall PC processor market, which was at the center of last week's $1.25 billion settlement between Intel and AMD, it still shows the level of Intel's dominance, according to Peddie.

Nvidia has taken to lampooning Intel. Here, CEO Paul Otellini is the object of satire on Nvidia's 'Intel's Insides' Web site.

(Credit: Nvidia)

Nvidia claims these latter market share figures reflect Intel's "bundling" tactics--the same carrot-and-stick tactics that AMD has cited for years and that were spelled out in a complaint filed by New York's attorney general earlier this month.

Intel is trying to impede competition on two chipset fronts, according to Nvidia. One front is the burgeoning market for chipsets in Netbooks--tiny, inexpensive laptops that are typically priced around $350. In this market, Nvidia sells its Ion chipset, which competes with Intel's integrated graphics product.

"Intel's tactics with Ion have been the most aggressive we've seen from a competitor. They have offered the Atom [a total of three chips] for $25, but when the one-chip Atom is used with Ion, it sells for $45," Nvidia CEO Jen Hsun Huang said in a statement provided to CNET. "A customer can't even choose to resell the chipset and use Ion instead. What's the point of Nvidia getting an Intel bus license if it's impossible to overcome Intel's pricing bundles?" he asked, referring the licensing fee that Nvidia pays Intel.

"We'll keep growing as a company, but further action needs to be taken to protect consumers," Huang said.

Intel disputes this. "He's playing a trick of numbers, said Intel spokesman Chuck Mulloy. "He's giving you a $45 list price--that nobody pays--for a part and then a negotiated price (which is more realistic). He's mixing apples and oranges. We have scrubbed and continue to scrub our pricing practices as it relates to chipsets and processors. It's all above cost. And that meets the legal standard worldwide."

In Netbooks, Nvidia has made some headway this year; its Ion chipset has been used in Netbooks from Hewlett-Packard and Lenovo, among others--and Huang concedes this. But Peddie said Nvidia still faces a formidable challenge. "They're nibbling away it at. But it's a pretty big hill to climb," Peddie said.

In the second front of Nvidia's most hotly-contested feuds with Intel, the former has halted development of chipsets for Intel's new "Nehalem" processor technology (marketed as the Core i series of chips), following a complaint filed by Intel in February--which Nvidia then countered in March. Intel alleged in its motion for a declaratory judgment that the 4-year-old chipset license agreement with Nvidia does not extend to Intel's future-generation processors with "integrated memory controllers," which includes Intel's newest Nehalem Core i processors.

"It's meant to get Nvidia to cease and desist from citing that they have a license," Peddie said. "That's an interesting tactic because if the court rules in favor of keeping Nvidia from saying they have a license, it also creates the burden on the OEMs [PC makers] of not wanting to get in a crossfire between Nvidia and Intel," he said.

Intel again disputes this. "It's not seeking to prevent them from doing anything. For well over a year and including mediation, we argued with Nvidia about their rights under that agreement. And we tried multiple times to reach an agreement. And we could not," Mulloy said. "We asked the court to tell the parties what the agreement means. At the end of that process, we'll work with them and try to figure out what to do next."

Note: Mercury Research numbers were provided by Nvidia.