Intel vs. ARM: The Battle of 2012

The following video is part of our nationally syndicated Motley Fool Money radio show, with host Chris Hill talking with Seth Jayson, James Early, and Ron Gross about what investors should expect in 2012. In this segment the guys discuss why the battle between chipmakers Intel and ARM Holdings will be one to watch in the year ahead.

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  • Report this Comment On January 03, 2012, at 7:52 PM, russfischer1013 wrote:

    Since virtually all the smart phone chip suppliers use TSMC as their fab, the contest is better characterized as between Intel and TSMC. As of to today it looks like TSMC has admitted defeat.

    See below

    TSMC VIEWS INTEL AS INDIRECT COMPETITOR

    13 hours 20 minutes ago - Asia Pulse via Comtex

    Taiwan Semiconductor Manufacturing Co. (TSMC, TAIEX:2330), the world's largest contract chip-maker, views Intel Corp. as a special rival because the U.S. chip-maker is competing against TSMC's customers, company chairman Morris Chang said Monday.

    "TSMC's technologies and performance have reached quite a high level, bringing us into contact with different rivals," Chang said in an interview with Chinese-language Economic Daily News.

    "The competitors we face are Samsung Electronics Co. (KSE:005930) and GlobalFoundries Inc., with Intel standing 'behind a veil' because it is a rival against many of our customers," Chang said, adding that these TSMC customers include integrated circuit designers and integrated device manufacturers.

    Intel, the world's top chip-maker, currently has two contract foundry customers making field programmable gate array (FPGA) products, which do not compete directly against Taiwan Semiconductor Manufacturing Co. (TSMC, TAIEX:2330), Chang said.

    He said the semiconductor sector used to be led by giant U.S. and Japanese companies, but TSMC has been viewed by these companies as a "formidable" rival since two to three years ago due to its upgraded competitiveness.

    Samsung and GlobalFoundries are newcomers in the industry, Chang said, and suggested that TSMC's customers should diversify their foundry sources rather than rely on TSMC only.

    "All of our customers rely on TSMC in foundry production, and Intel relies on its own foundry plants," he said. "If our technologies are not improved enough and Intel keeps improving its technologies, our customers' products will lose competitiveness to those of Intel. It's horrible to imagine the outcome."

    "TSMC will stand behind our customers and cooperate with them. The battlefield between our customers and Intel is where we compete against Intel," he added.

  • Report this Comment On January 04, 2012, at 12:52 AM, SSchlesinger wrote:

    I thought there was going to be some news associated with this story. Not really. Last year there were 400 million pc's sold, and around 50 million tablets. I don't see this "eclipse" happening anytime soon. Not at least until the tablets find much lower prices. $100 for a 7" tablet and $200 for 10" tablet. That's about a year away.

    As for TSMC admitting defeat. Not quite yet. They still have some tricks up their sleeves for the next year or so. The real problem is that it's going to be a very long time before they get below 20nm and Intel will be there next year. By next year Intel will have a 2 to 3 year manufacturing lead over ARM. You'll see them start to pull away this year. But for this year you will also start to see 28nm ARM processors. Thus these guys are right, it will start to be a dogfight. My money is on Intel!

  • Report this Comment On January 04, 2012, at 12:18 PM, verylargelarry wrote:

    SSchlesinger...

    "By next year Intel will have a 2 to 3 year manufacturing lead over ARM."

    How is this so? ARM does not manufacture chips, but they do design them. ARM then licenses their designs to Intel, Taiwan Semi, Qualcom, and virtually every other chip manufacturer.

    Like you, I thought some news would be found here. Or at least enlightened perspective.

  • Report this Comment On January 06, 2012, at 4:52 PM, winklerf wrote:

    ARM doesn't license their architecture to Intel. Intel sold that group to Marvell back around the time they introduced Atom, because they had decided to put everything behind the x86 architecture.

    Saying ARM licenses to Taiwan Semi is a bit of a stretch. They have physical designs for TSMC processes, which go into products produced by their customers like TI, Qualcomm and nVidia. By the way, Qualcomm manufactures exactly nothing. They are a design house only. They use foundries like TSMC to fab their IC designs.

    Also, the trend in electronics manufacturing has been toward fewer manufacturers because costs are going up to run a fab. First, a manufacturer becomes uncompetitive because they don't have enough volume to justify the cost of process development. Then they go out of business in high end processes because they have no hope of keeping up and use someone else for manufacturing.

    Currently, there are three main players in process development, Intel, the IBM alliance (Global foundries, Samsung, Toshiba, etc) and TSMC. Intel spends the most by a significant margin and it shows in their superior transistor performance, and how far ahead they are despite having the longest design cycle products (CPUs). I'm not sure how IBM/TSMC fall out, but I would guess that Samsung's volume from manufacturing the top two smart phone chips, theirs and Apple's, puts the IBM alliance ahead of TSMC in investment.

    All of this puts the statement from TSMC's Chang in perspective, though his comment about Global Foundries being a newcomer is ridiculous since AMD, the company Global Foundries was spun off from, has been in this fab business far longer than TSMC. Chang sees that he is being out-spent and out-innovated, and will soon be relegated to the second tier as his company struggles with metal gates to allow for high k dielectrics, immersion lithography to fabricate smaller feature size processes, 3d devices to deal with imminent physical limitations that will then lead to a requirement for more advanced quantum physical devices. He is in over his head and he knows that there will soon be only two or one top tier manufacturer, and TSMC won't be one of them.

  • Report this Comment On April 18, 2012, at 1:49 PM, KartikJay wrote:

    Diagrammatic representation of the Intel vs. ARM battle:

    https://picasaweb.google.com/117014041543577604604/IntelVsAR...

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