Sunday, June 6, 2010

Intel Sees Growth as Devices Multiply

The Wall Street Journal
Company says rising number of tablets, TVs and cars make its one-billion-chip shipment target attainable

David Perlmutter is executive vice president and co-general manager of Intel Corp.'s architecture group. He is responsible for developing and marketing Intel's platforms for all computing segments including desktops, laptops, netbooks, hand-helds and other consumer electronics.  As co-general manager, Mr. Perlmutter is focused on product development and architecture technology decisions across microprocessors, chipsets, communications and graphics. Prior to this role, Mr. Perlmutter was vice president and general manager of Intel's mobility group. He joined Intel, the world's largest semiconductor maker, in 1980.  At the Computex trade show in Taiwan, Intel unveiled new chips and features based on its Atom processor family—a low-power chip that is widely used in netbooks.

Lorraine Luk spoke with Mr. Perlmutter on the sidelines of the show in Taipei, where the executive elaborated on industry trends and spoke about where Intel is looking to focus on in terms of future products. The following is an edited version of the interview.

WSJ: What product categories to do you see driving growth for Intel in the next few years?

Mr. Perlmutter: The [personal computer] market is still expected to have quite significant growth in the next few years. We expect the market to double in four or five years. Another big growth driver is data centers. With the amount of devices growing and as we push more data to cloud computing, we are moving to serve this growing market.

Last but not least, all these new devices [at Computex], we very much believe that many of them will be based on Intel's Atom processor. People are carrying more than one device in their pockets, in their cars, in their houses so there are growth opportunities to sell way more than we sell today.

WSJ: At the Computex show here in Taiwan, Intel unveiled a product for tablets in early 2011 that is known by the code name Oak Trail. How will the new product contribute to the company's revenue and growth? [Oak Trail is a system on a chip that combines a microprocessor with other specialized circuity. Intel says the new product will offer a 50% reduction in average power consumption.]

Mr. Perlmutter: Next year, the netbook will take a nice portion. We just achieved 40 million units in netbooks last year, which is a nice business already. In TVs, we just started. In 2011, the majority of our business is going to be chips used in PCs and data centers.

Intel has said it plans to achieve annual shipment of one billion chips in five years. Are you on track to achieve this? How do you plan on achieving this ambitious goal?

Mr. Perlmutter:
We expect to ship more than 350 million units this year. If we double the shipment next year, it will be 700 million, and 700 million does not seem like a big number because the opportunities in TV, tablets, and cars are getting computerized. Each of these markets is a hundred million units a year.

WSJ: ARM Holdings of the U.K. says it's late for Intel to launch tailor-made chips for tablets. What are you doing to ensure you're staying competitive in terms of power consumption and efficiency of chips?

Mr. Perlmutter: I believe we are matching competitive products today on power consumption and it is going to get better. We're delivering not 10% in terms of performance but more than two times, or three times or even four times. Our gaming performance is stellar. So we have a lot of capabilities. How can people say we're late to the tablet market? Tablets are being created now and we can't say who's going to be successful and who may not.

WSJ: How would you characterize Intel's lead in manufacturing technology compared with other chip makers such as Taiwan Semiconductor Manufacturing Co.?

Mr. Perlmutter:
We are at least a year or if not more ahead of [TSMC]. We are shipping chips today produced on 32-nanometer technology. No one ships 32-nanometer. And I think other people will ship, maybe next year. It's another important factor which people don't pay attention to. It's getting harder and harder to control power in these modern processing technologies.

WSJ: What are some of the opportunities for Intel in emerging markets?

Mr. Perlmutter:
The opportunities in emerging markets are huge. China is already the second-largest [PC] market after the U.S.. Brazil is either already No. 3 or close to be No. 3 soon. I believe that within a few years China will surpass the U.S. in size. We see India, Indonesia and the Middle East growing by a double-digit [percentage] for PCs and other devices across the board. I think it's just the very beginning of opportunities to sell more and more computing devices and people in emerging markets want good technology.