Chips are down as Intel faces new rival

INTEL USHERED in a new generation of chips this week, demonstrating their abilities to attendees at the Consumer Electronics Show in Las Vegas and promising the next stage of the PC’s evolution.

The second generation of Intel’s Core processors perform faster and better than their predecessors, working more than 60 per cent faster at tasks such as using Excel or working with video.

However, Intel is also facing new competition, with graphics firm Nvidia announcing its intentions to develop a central processor. The move is seen as a direct challenge to Intel, which shipped one million PCs a day in 2010.

Nvidia is developing the product, codenamed Project Denver, using processing architecture from ARM Holdings. Processors will be integrated on the same chip as the graphic processor.

Jen-Hsun Huang, chief executive of Nvidia, said: “We are designing a high-performing ARM CPU core in combination with our massively parallel GPU cores to create a new class of processor.”

In another blow for Intel, Microsoft said on Wednesday it planned to bring in a version of its Windows operating system that works with ARM chips.

Intel, however, remained upbeat about its prospects. “We’re coming together this year at CES at a fantastic time for our company and for our industry,” Intel chief executive Paul Otellini said. “Intel is coming off of its best year ever and so is the industry.”

The company said its new processor, codenamed Sandy Bridge, would contribute to the next evolution of the PC.

Mooly Eden, vice-president of the PC client group at Intel, presented interesting statistics. Some 247 billion e-mails are sent every day, but only 50 billion are read. Every day, two billion videos are viewed on YouTube and 25 billion photographs are uploaded to Facebook alone every month.

“Today, people communicate with pictures and video rather than text,” Mr Eden said. “Demand is going up and up.”

Mr Eden then demonstrated the abilities of the microprocessor to a packed conference room, showing how it could be applied in video games, imaging and transcoding.

There are also bonuses for the entertainment industry, as the chip allows users to stream high-definition premium content but also builds in protection to safeguard that content.

The company is confident that the new chips will do well. Mr Otellini said Sandy Bridge would account for about a third of Intel’s revenue. He added that the company would update the industry on its progress with Meego, an open-source platform announced at Mobile World Congress last year and was the result of a partnership with mobile phone maker Nokia.