Intel CEO comments on Nvidia, economy, flash

Intel CEO Paul Otellini commented on competition with Nvidia, the economy, and the possible fate of its flash memory factories on Wednesday at a tech conference in San Francisco.

Otellini began by speaking to the fact that the global economic downturn has depleted inventories of chips. "I don't think there's much inventory out there. It's hard to imagine that there's a significant drop below this." He made his remarks at the Goldman Sachs Technology and Internet Conference 2009, which was streamed live.

Intel CEO Paul Otellini

(Credit: Intel )

And moving quickly to the next generation of chip technology is critical to get Intel through the downturn. "One of the reasons you saw us be so bold as to make an announcement on 32-nanometer (manufacturing technology) two weeks ago is that we are quite confident in the benefit of the technology. It will lower our cost. We'll have a lower cost structure by moving our product line to the technology. That gives us comfort and will allow us to do well when the market recovers."

Otellini said that Nvidia is not in a strong competitive position. "If you don't have a microprocessor, what else do you have to sell?" he said, countering Nvidia's claims that the industry is becoming more centered on graphics chips. "The graphics subsystem for most machines will be subsumed into the microprocessor. So what Nvidia is doing is making an argument to defend the status quo," he said. He said if you want higher performance you can buy a discrete graphics chip. "You can buy it from them or you can buy it from us," he said, referring to Intel's upcoming Larrabee graphics chip.

And what about Intel's flash memory strategy? "It may not be essential for us to have our own NAND factories to build (flash memory). We could probably specify the product that we want and buy it from third parties," he said.

Speaking about Atom he said the "shortest time to money" is Atom in the embedded market place. As Intel moves to a system-on-chip (SOC) design it will become more profitable. "With north of a billion-dollar business there, that should triple in the next few years," he said. Embedded chips are used in cars, consumer electronics, and industrial applications, among other areas.

About Netbooks he said: "We lit a fuse. It's the only bright spot in the PC industry at this point in time." But he added: "Atom is still less than half the performance of our entry-level Celeron product. It wasn't designed to be a notebook replacement part." He added the Microsoft will limit the starter edition of Windows 7--that will be used for future Netbooks--to three applications running at once. "You'll be underwhelmed," he said, relative to mainstream notebooks

He also addressed smartphones and the future Moorestown Atom chip. "You saw some announcements last week with LG (Electronics). You'll see some announcements in the next month or so from some other major handset manufacturers. Watch that space." He also added that Intel, with its 32-nanometer technology, is trying to move from the MID (mobile Internet device) design to true smartphones. "System-on-chip allows us to get down to a single chip...so we can get the MID form factor--which is sort of an ultra-mobile PC-- into the mobile handset form factor. That's critical for us."

[docster87]

I still do not believe that Intel can make really good graphic chips. Why not leave GPU separate from CPU? The last two computers I've bought have had separate RAM for system & GPU, and I really doubt if I'll ever again consider a computer that shares RAM between system & graphics (unless the computer is just for fun & not a primary use computer). I actually altered my last computer purchase due to such memory sharing - I really wanted to avoid that situation, so I opted for a good desktop rather than a cheap laptop that matched my price range.

[Spartan_458]

Discrete graphics will always be better than integrated. I like Intel processors, but I don't like Intel doing graphics.

I think I'll go out and buy a nVidia graphics card.

[NewsReader_]

Agreed. Stick to making CPUs. Anyone serious about graphics performance will buy a separate card from a graphics specialist. Partner with them on making the bus faster rather than building your own version. Intel is not exactly the leader in device driver quality. I cannot recall the last time my video driver crashed from ATI or NVidea. Intel on the other hand is a bugcheck waiting to happen for both GPU and NIC.

[renGek]

Why would anyone who cares about graphics waste their time with anything but ATI or Nvidia? Intel is not even a close third.

[Boo-Ga-Loo]

Intel has been a big leading in innovations with chip Technology for the past decade or so. During which time they have been re-investing in R and D and having great success with Mores Law. The company has learned many lessons from the past. They have developed a very competitive product with Larrabee. Until you have seen it, I would not count them out as third or any other last pace. The reality of it is, they are the 1st to build SOC and do so profitably.

[alistaircase]

"Why would anyone who cares about graphics waste their time with anything but ATI or Nvidia? Intel is not even a close third."
I think this person believes Intel is currently in the graphics business. Anything but. Their integrated graphics are poor, but Larrabee will be nothing like that. We should be waiting with bated breath to see whether Intel pull another Core 2 Duo.

[afaet]

75% of PCs sold already use integrated graphics, <www.jonpeddie.com> And Intel is the leader in that space. Moore?s Law say those will be integrated in the CPU and most discrete graphics will transform into integrated chipsets. What market will be left for Nvidia?s powerful discrete graphics? They will be holding a very short stick in a few years. That is the logic behind the AMD-ATI merger.

[SeizeCTRL]

No matter how many stories like this get posted on the internet... Intel will never be able to successfully spin the facts. Truth is Intel sucks at graphics. Everyone knows it! It may be acceptable for bottom line cheap notebooks / netbooks, but anyone who wants a bit more than the basic graphics expects a chipset or an actual pci-e/agp graphics card.

I almost think that Intel plants these types of articles hoping to convience the world that they are the leaders in a field that they shouldn't even be in... for that matter, they aren't even in the same race. Nvidia and AMD/ATI are like formula 1 racecars while Intel trials way behind in a rusty old pinto.

[Turks68]

I just listened to the most recent episode of the AVault Podcast in which we had the director of PR for NVIDIA Derek Perez was on as a guest. It can be found at our site at http://podcast.avault.com. He had some choice words to say about Intel. I thought it was hilarious too. One of the hosts asked if he thought his CEO could beat Intel's CEO in a street fight. He said NVIDIA's would win. Hilarious!