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During Intel's earnings conference call on Tuesday, CEO Paul Otellini talked about the growth of notebook PCs versus Netbooks, and Windows 7 adoption in business, among other topics.

Otellini was quick to trumpet the fact that its mainstream notebook business beat Netbook growth. "We saw the sequential unit growth rate of notebook processors and chipsets actually exceed the growth rate of Atom processors and chipsets," he said.

Later in the call, Otellini said: "While Atom and Netbooks are important growth drivers for us, our traditional notebook business remains one of the primary drivers of revenue growth and we expect that to continue in the future."

Otellini, again in the call, expanded on this theme, adding that while Netbooks should see significant growth in 2010 over 2009, the notebook market is flourishing. "We're still bullish (on Netbooks) but what we've seen this quarter though is that the notebook market is alive and well and Netbooks are market-additive for Intel and the industry," he said. "Market-additive" is code for an ancillary product, not a mainstream product.

Intel CEO expects more attractive ultra-thin laptops in the coming months

(Credit: Intel )

He also addressed the new category of ultrathin laptops, which are inexpensive laptops--between $500 and $900--that slot in above Netbooks. "The bulk of the units that have shipped to date were single-core versions of the products. Late last quarter, we introduced the dual-core version of those products. You'll see a number of laptops show up in retail with the dual-core versions for the holiday season...more ergonomically designed, thinner, lighter."

Responding to analyst questions, Otellini also addressed Windows 7 adoption in business. "We see a lot of interest at corporations around Win 7 and the new Nehalem-based (PC models)," he said, referring to Intel's new Nehalem-based Core "i" series of processors. "They're made for each other in terms of the performance and power management and security characteristics."

He continued: "I would expect that the (corporate Windows 7) evaluation process will happen over the rest of this year and we'll start seeing corporate purchases on a refresh basis begin in 2010."

Here's a rundown of other comments:

• Consumer segment strong: "The strength in our business remains primarily consumer driven with broad-based demand across all geographies."--Otellini.
  
• Growth phase: Refuting a question about Intel becoming "smaller" next year: "We're finished with the cutting phase of our efficiency efforts and now in the growth phase of that efficiency efforts."--Chief Financial Officer Stacy Smith.
  
• Inventory hubs: At large PC customers, component inventories levels are at roughly half of the peak level late last year and approximately flat throughout 2009. Intel has a better handle on inventories now using a mechanism called inventory hubs. "We hold the inventory for our large OEM customers, who then pull inventory only if needed...This give us increased visibility into real-time production levels."--Otellini
  
• Nehalem server processors: (dual-processor). "It's not so much an upgrade cycle that's driving the volume right now, it's economics of the data center. People are looking at swapping eight to nine older-generation servers for a single Nehalem server."--Otellini.
  

SAN FRANCISCO--Dell is launching its first laptops with Intel's new Core i7 processor for laptops.

The Intel "Clarksfield" Core i7 processor boasts four cores and is the chipmaker's first mobile chip based on its new Nehalem microarchitecture. Most Intel processors will move to this design in 2010.

Dell is trying to take an early lead in embracing the new technology. Dell's flagship product for the mobile Core i7 will be the 15-inch Alienware M15x gaming laptop. Dell is also offering the chip as an option on other laptop models worldwide, including the Studio 15 and Studio 17.

At the Intel Developer Forum today, David Perlmutter, executive vice president and co-general manager of Intel Corporation's Intel Architecture Group, is discussing Intel's mobile Nehalem platform that also includes a future chip codenamed "Arrandale," which will integrate graphics into the CPU, or central processing unit.

The Core i7 is packaged with the Intel PM55 Express chipset--companion silicon that assists the processor in communicating with the rest of the system. Two features that differentiate Core i7 from Core 2 Duo processors (the most-widely-used chips in laptops today) is Turbo Boost and Hyper-Threading. Turbo Boost speeds up and slows down individual cores to meet processing and power-efficiency needs, respectively. Hyper-Threading can double the number of tasks--or threads--a processor can execute.

The Alienware M15x configurations include the Intel Core 920XM CPU and 1GB NVIDIA GeForce GTX 260M graphics chip.

The Alienware M15x will come with Intel's first Core i7 mobile processor.

(Credit: Dell)

The Dell Studio 17 will feature the Intel Core i7 720QM 1.6GHz processor, a 1GB ATI Mobility Radeon HD 4650 graphics chip, 17.3-inch HD+ (1600x900) display, and 9-cell battery.

The Studio 17 starts at $1,099.

Dell will also offer the Studio 15 with Core i7. Configurations include Core i7 720QM 1.6GHz, 512MB ATI Mobility Radeon HD 4570 graphics chip, and 4GB of memory. Pricing start at $999.

And the Dell Studio XPS 16 will come with a Core i7 option, with a starting price of $1,249, Dell said.

I have a few questions to ask at this week's Intel Developer Forum....

Why is Intel using a more expensive chip for the new Core i5 and cheaper Core i7 processors? Why does this new chip--code-named Lynnfield--appear to have features Intel isn't using? What's the connection between Lynnfield and a future Intel chip code-named Jasper Forest?

These questions arose as I've been getting ready for IDF by reviewing recent press releases and news stories about Intel's current and forthcoming products, and chatting with fellow analysts about what we're looking forward to seeing there.

The recent announcements of the Core i5 and new Core i7 processors seemed pretty straightforward. Consider Brooke Crothers' piece on CNET: "Out with the old: Intel makes Core 'i' chips cheap." As Crothers explains, the facts are simple: the new Core i7 800-series slots in under the existing 900-series and replaces some older parts. The Core i5 is a new line, clearly positioned below the Core i7. Features, performance, and prices are all lower. That's as it should be.

But in looking at the coverage on some enthusiast sites, a fact jumped out at me. The Lynnfield chip is 12.5 percent larger than the Bloomfield chip used in the higher-priced Core i7 900-series processors (296 square mm vs. 263 square mm), in spite of the fact that Lynnfield only has two memory interfaces and no QuickPath Interconnect (QPI) link.

The big difference between the chips is the addition of 16 lanes of PCI Express on Lynnfield, but that's only about 80 pins plus the control logic. The changes should have roughly canceled each other out. Maybe one chip would be a little bigger than the other, but not by this much.

Updated at 1:30 p.m. PDT: adding information about Core i7, i5, and i3 branding.

Intel's upcoming "Arrandale" will be the first highly integrated chip of its kind from Intel and is expected to run the gamut of laptop designs, from ultrathin to mainstream.

Dell ultrathin Adamo: a category of laptops that will likely use a number of different Arrandale chips

(Credit: Dell)

Due by the fourth quarter, it will be the first Intel product to put two processor cores and a graphics function together in the same chip package. Intel covered the underlying architecture in a presentation at the Hot Chips conference in Palo Alto, Calif., this week and in a recent blog described the design, saying it "will be the basis of all upcoming new Core chips (Core i3, i5, and 7) over the next few months."

Arrandale will come under the Core i3, Core i5, and Core i7 brands, using the chipmaker's most advanced 32-nanometer technology (Intel chips are currently built on a 45-nanometer process) and will populate consumer and business laptops.

The compact chip, however, is not without its challenges. "A high level of integration is always a compromise. There's never a free lunch," said Ashok Kumar, an analyst at investment bank Collins Stewart. "It's a question of how much performance you have to compromise to get that level of integration and low power consumption."

"There won't be a significant jump in performance, but price and power consumption will be lower," said Jon Peddie of president and founder of Jon Peddie Research.

Last month, Japanese-language technology Web site PC Watch published specifications for Arrandale and other upcoming Intel processors that were, PC Watch says, obtained from an OEM (original equipment manufacturer) computer manufacturer. It shows Arrandale coming in mainstream as well as low-voltage and ultra-low-voltage versions. The latter two classes of chips have typically gone into upscale svelte designs such as the Dell Adamo and Apple MacBook Air.

Arrandale-based chips, however, are expected to quickly go downmarket and bring Intel's new Core i "Nehalem" microarchitecture to the new category of laptops called ultrathins, which resemble the MacBook Air and Dell Adamo but are about half the cost.

A separate series of new chips for Netbooks, codenamed Pine Trail, will also appear by early 2010 and feature a high level of integration.

The first Core i7 mobile processors will arrive by September or October. This quad-core series, codenamed Clarksfield, will be for high-end gaming laptops and mobile workstations. (For the codename buffs who actually keep track of these things, Calpella is the platform for Clarksfield, Westmere is the platform for Arrandale.)

Nvidia is readying silicon that would work with Intel's newest processor design, according to a report. Intel claims Nvidia does not have the legal rights to make companion chips for its newest processors.

In February, Intel alleged in a lawsuit that the 4-year-old chipset license agreement with Nvidia does not extend to Intel's future-generation processors with "integrated" memory controllers, such as its "Nehalem" Core i series of processors.

A chipset is companion silicon to the main processor. Integrated memory controllers are built into the processor itself to increase performance between the processor and memory.

According to a report on Chinese-language Technology Web site HKEPC, Nvidia is planning to bring out a MCP99 chipset that supports Nehalem processors and Intel's Direct Media Interface, or DMI. Nvidia cited DMI back in February as a technology that Intel was trying to prevent it from using.

Despite the report's claims, it is not clear yet whether Nvidia would in fact bring out a chip before the legal matter is settled with Intel.

Nvidia had no comment on the report.

Nvidia's current 9400M Intel-compatible chipset, which is used with Core 2 architecture-based processors, has been successful. It is used in Apple's MacBook and Toshiba's Qosmio lines, for example, and in Netbooks that use the Atom processor.

During Nvidia's July 26 earnings conference call, in response to an analyst's question about building chipsets for Intel's Nehalem processors, Nvidia CEO Jen-Hsun Huang said: "We're not necessarily building chipsets for future Intel buses. We've not commented anything on that and so you are just going to have to wait to see what we come up with," he said. "Our company is...pretty darn clever. There is a lot of ways to skin the cat," he said.

Intel said the matter is being left to the courts. "We tried many times to resolve the conflict but we couldn't resolve it. So we asked the courts to," said Intel spokesman Chuck Mulloy. "By the time something comes to market, hopefully we'll have some resolution," Mulloy said.

Updated at 3:45 p.m. PDT: adding comments from earnings conference call.

Intel on Tuesday posted a second-quarter loss of $398 million, stung by a fine imposed by the European Union, but the chipmaker is optimistic about the second half of the year as it beat analyst estimates.

The loss of 7 cents a share compares with a profit of $1.6 billion, or 28 cents a share, reported a year ago. Without the $1.45 billion EU fine, Intel had a profit of $1 billion, or 18 cents per share. Analysts had expected a profit of 8 cents per share.

"Intel's second-quarter results reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half," said Paul Otellini, Intel CEO in a statement.

In an earnings conference call Tuesday afternoon, Otellini qualified this statement somewhat, saying that there won't be a "recovery to prior levels."

Revenue was $8 billion, down from a year-earlier $9.5 billion. Revenue from Intel Atom microprocessors, used widely in Netbooks, and chipsets was $362 million, up 65 percent sequentially.

Gross margin, a crucial profit indicator, was 51 percent, up 5.5 points sequentially but down from 55.4 percent posted a year earlier.

The replenishment of inventories by customers was a positive sign, said Stacy Smith, Intel's chief financial officer, speaking during the conference call. "In anticipation of a seasonally up second half, the supply chain (buyers of Intel chips) began refilling inventory positions that had been depleted over the past two quarters," Smith said. "As a result, we experienced better-than-expected demand for microprocessors and chipsets."

"Consumer purchases led the way," Otellini said in the conference call, referring to consumer laptops that saw growth.

Corporate enterprise business, however, was "weak," Otellini said. Though the Intel CEO expects companies to update aging computers, "we're not counting on that in large measure in 2009," he said. Dell executives said Tuesday that global technology spending will likely remain weak for the near term as companies delay computer purchases, according to an AP report.

Otellini said he had "no opinion" on the impact of Windows 7--due later this year--in the consumer market but expected businesses to "get ready for buying next year."

Market researcher iSuppli said Tuesday that for the first time since the Dot-Com bust of 2001, the global PC market will suffer a contraction in unit shipments in 2009, due to a combination of falling IT spending and plunging sales of desktop computers.

Global PC shipments are expected to decline to 287.3 million units in 2009, down 4 percent from 299.2 million in 2008, iSuppli said.

"If you look across the pond in Europe demand is decidedly weak," said Ashok Kumar, an analyst at investment bank Collins Stewart. "And in China all the anecdotal data points are no better than tepid. None of the geographies are firing," Kumar said.

I've been getting a fair number of questions about multi-threading the past couple of weeks. The reason is that Intel has been previewing its "Nehalem EX" Xeon processor in advance of Advanced Micro Device's six-core "Istanbul" CPU launch. Intel's Nehalem generation has simultaneous multi-threading (SMT)--which Intel calls Hyper-Threading (HT)--while Istanbul does not.

I wrote about this topic in depth a couple of years back in "Gradations of Threading," but it's worth reviewing in the context of these new server processors.

First, a little terminology.

A thread is a sequence of instructions that can execute in parallel with other threads. The details of what exactly constitutes a thread and the relationship between threads and other structures such as processes vary by operating system. However, for our purposes here, think of a thread as an independent task.

Simultaneous multi-threading.

(Credit: Illuminata)

A core is, in most respects, a complete processor that includes all the hardware such as execution units, registers, and so forth required to execute a sequence of instructions. Although multiple cores on a single die or in a single package (i.e. a chip or socket) may share certain resources such as cache memories, logically each core is a full central processing unit (CPU). That multiple cores are packaged together today is essentially an implementation detail that relates to getting the best performance out of the most economically sized silicon die.

Absent multithreading, each core can execute one thread at a time, running that thread until it has completed or until the operating system scheduler swaps it out for another thread.

SMT changes that 1:1 relationship. On a processor with SMT, more than one thread can execute on a single core at the same time--in the case of HT, it's two threads per core.

SMT potentially allows a processor to be more efficiently utilized. The reason is that modern microprocessors have multiple execution units within each core. For example, they have separate logic to handle integer operations and floating-point operations. Thus, in principle, if a thread with mostly integer operations runs concurrently with a thread that mostly crunches floating-point numbers, we could keep the processor busier by running both threads at the same time than we could running them sequentially.

The other main benefit is to hide memory latency. CPUs have to operate on data and that data has to ultimately come from memory or disk. Computer designs incorporate all sorts of techniques--such as caches and prefetching--to keep data close to processors in time and space. Nonetheless, processors still spend a lot of time waiting for data to arrive from relatively pokey memory. SMT lets a CPU quickly switch away from a thread that's sitting idle waiting for associated data to arrive.

SMT is therefore essentially a technique to use a processor more efficiently. It does not itself add execution resources to a core. And, in fact, the duplicated hardware and other logic that SMT requires to function (such as registers) takes space away from implementing other features (such as larger caches) that could themselves provide alternative ways to boost chip performance.

Intel's HT implementation--a fairly "lightweight" approach relative to IBM's on its Power processor--uses on the order of 5 percent of the total chip area to deliver typical performance gains of between 10 and 20 percent. (Optimized applications can see bigger gains. On the other hand, applications that are already efficiently using the CPU's execution units--or that are bottlenecked in ways that SMT can't assist with--may see no gain at all.)

Ultimately SMT is just one performance feature among many that may or may not be a match for a given processor's design. In Intel's case, it's been in some x86 designs but not others since it debuted on the Pentium 4; Itanium uses a simpler Temporal multi-threading approach.

SMT's in the plus column of the features checklist. But what really matters is overall processor performance on relevant workloads and platform capabilities. SMT is one tool to get there.

Intel on Tuesday said it will ship a server chip that contains up to eight processing cores later this year, while IBM showed off a high-end server in the works that uses eight such chips, yielding 64 cores.

Intel's Nehalem-EX architecture supports up to eight processors and each processor can integrate up to eight cores.

(Credit: Intel)

Intel's Nehalem-EX processor, in production later this year and expected to be shipping in high-end server systems by early 2010, will feature up to eight cores inside a single chip that supports 16 threads, according to Boyd Davis, Intel's general manager of the Server Platforms Marketing Group, speaking at a teleconference on Tuesday.

Using threads, Intel essentially doubles the amount of work that can be done on each processing core.

IBM, which participated in the conference, discussed a server currently under development that uses 64 Nehalem-EX cores (eight processors) and can handle 128 threads, according to Alex Yost, vice president IBM BladeCenter. "We're very excited today to be the first to demonstrate Nehalem-EX," Yost said.

Nehalem-EX will also double the memory capacity with up to 16 memory slots per processor socket, and offer four high-bandwidth "QuickPath" Interconnect links.

Intel also said the currently-shipping Nehalem server chip is making market gains. Intel's currently-available Xeon 5500, the first server processor based on Intel's Nehalem architecture, will be "greater than half of shipments" for Intel's high-volume two-processor (aka, "two-socket") server shipments by August, according to Davis.

"Customer acceptance has been quite strong," Boyd said. "From an introduction at the very end of March to representing the majority of our shipments in the market for two-processor servers by the August time frame," he said.

Intel showed off a prototype server that can accommodate four eight-core Nehalem-EX processors.

(Credit: Stephen Shankland/CNET)

Intel's prototype Nehalem-EX server accommodates eight of these memory cards. They'll use relatively conventional DDR3 memory rather than the FB-DIMM technology Intel's current Xeon 7300 systems.

(Credit: Stephen Shankland/CNET)

Updated at 10:00 a.m. PDT with correction about launch of Nehalem-EX processor.

Intel is expected to announce details of an 8-core processor for the high-end server market next week.

The chip itself will not actually ship in systems until late 2009 or early 2010.

The 8-core "Nehalem-EX" Xeon processor is designed for servers that can use more than two processors (referred to as "sockets" in server argot). Currently, Intel is shipping Nehalem Xeon processors for servers with two sockets.

Nehalem is the same architecture used in Intel's Core i7 desktop processor line.

The Nehalem-EX is expected to become Intel's top-line Xeon processor. Currently, the six-core "Dunnington" processor, based on Intel's older Penryn architecture, is Intel's highest-performance chip for multi-processor servers.

Nehalem-EX packs 2.3 billion transistors and its eight cores are capable of executing 16 threads (or tasks) at the same time. The chip also has "integrated power gates" for lowering power-consumption.

The announcement of details is slated for May 26. Boyd Davis, Intel's general manager of Server Platforms Marketing Group, will host the roll-out event and "discuss how this new server product raises the standard in cost-effective RISC replacement solutions," according to an Intel note about the event.