September 22, 2003 6:45 AM PDT
Intel: Happy days will come again
Sources of optimism for Intel include wireless technology, faster processors and spending growth in emerging markets, Jason Chen, Intel's vice president of sales and marketing, said in the opening keynote address at the Computex trade show here Monday.
The collapse of the Internet mania was only the first in a series of setbacks for the industry, Chen said. "The 9/11 tragedy, the Enron scandal, the Iraq war and SARS all had a negative impact to the industry," Chen said.
Indeed, SARS--severe acute respiratory syndrome, a flulike disease--struck Taiwan hard. Among other things, it forced Computex organizers to delay the show from its usual June time slot.
Now, though, Chen said, "we have a strong belief that the recession will come to an end."
In the dark years, spending on PCs--the bread and butter for Intel's chips--declined in mature markets such as North America, Japan and Western Europe, Chen said. Intel was aided, however, by growth in emerging markets such as China, he said.
"We predict the momentum will continue," Chen said of Intel's chip shipments. "By 2006, the emerging-market contribution to overall market shipments will go to 40 percent; 1999 was only 20 percent. That's a very significant signal to the industry."
Chen reiterated Intel's belief that computing and communications devices will converge so that the two capabilities will no longer be separate. The trend is best embodied today at Intel by Centrino, the company's Pentium M processor combined with wireless networking chips.
Wireless networking is growing fast, Chen said. There are 12.8 million wireless access points today, he said.
The 11-megabit-per-second 802.11b wireless standard is most common now, but Intel is preparing various higher-speed alternatives. Two near-term standards are 802.11a and 802.11g, two overlapping technologies with faster 54mbps transfer rates. Intel will first support combination "a" and "b" chips, due out in the fourth quarter. Combination devices supporting "b" and "g" will arrive in the first quarter of 2004. And tri-band chips supporting all three will arrive "about the middle of next year," Chen said.
For later delivery, Intel is working on chips for 802.11n, which "combines two radios to go all the way up to 150mbps," Chen said. The company also plans to release chips next year that support 802.16, the "WiMax" specification emerging to replace higher-speed, longer-haul network lines.
Despite all the contending standards, Intel asserts that there won't be fighting to ensure that one particular standard prevails. "Our view is that standards or specifications don't necessarily get into a battle. Our view is the all the standards will coexist," Chen said.
Technologists will get around the awkwardness of having several sometimes-incompatible networks by working on "seamless roaming" technology that will automatically transfer a computer user from one network to another.
Chen and his Intel colleagues also demonstrated two forthcoming Intel products, both early examples of Intel's shift from a manufacturing process with 130-nanometer features to one with 90-nanometer features. One chip, code-named Prescott, is the latest Pentium with an updated set of instructions and better hyperthreading to do two jobs at once. The other chip, code-named Dothan, is the successor to the current Pentium M. Dothan and Prescott are due to ship from Intel this year, Chen said.
Chen also indicated that Intel hopes to bring its business methods to the telecommunications industry. Telecom companies today are similar to computing companies two decades ago, with several proprietary systems competing but sharing few components. That won't last, Chen said. "We believe the telco equipment manufacturing industry will go through the same strategy shift from a very vertical, proprietary system to horizontal," in which many companies make interchangeable products that meet various standards.
Telecom companies will be forced to undergo this change, he said. Traffic growth for these companies is increasing, but revenue is flat, meaning that the only way to increase profitability is to cut operating and capital expenses. Horizontal integration, with many suppliers building compatible products, will lower equipment prices, Chen said.