It's well known that Intel (NASDAQ:INTC) has been dedicating more of its chip real-estate to integrated graphics capabilities. The reason? Intel believes it can get paid more for parts with beefier integrated graphics capabilities.
With the Haswell generation of processors, OEM adoption of the higher-end graphics configurations in Ultrabooks and higher-performance notebooks wasn't all that robust aside from Apple (NASDAQ:AAPL). With Broadwell, I'm seeing the same thing: Apple is using parts with higher-end graphics, while other PC vendors use the parts with lower-end graphics.
Might Intel be able to drive upsell to higher-end configurations with the Skylake generation of parts?
It's a tough sell today
According to Digital Trends, the performance difference between a 15-watt Broadwell chip with GT2 graphics (HD5500) and a 15-watt Broadwell chip with GT3 graphics (HD6000 with double the graphics cores as on the HD5500) is all over the place. Sometimes, the HD6000 is on the order of 66% faster (World of Warcraft), and in other scenarios, the difference is negligible (Battlefield 4).
Digital Trends said, though, that the HD6000 offered gains of "around 10% over HD5500."
Although the HD6000 is better than the HD5500, it's not surprising that many PC vendors choose to go with the cheaper chips. The performance gap just isn't all that huge in most cases, but I'd imagine that Intel charges quite a bit more since the Broadwell CPU with HD5500 graphics measures in at a die size of 82 square millimeters, while the part with HD6000 graphics comes in at a hefty 133 square millimeters.
With Skylake, this situation could potentially change.
eDRAM could help
If you've been following the various leaks around Intel's upcoming Skylake family of processors, you probably know that the higher-end GT3 parts will come with Intel's on-package eDRAM, which was first introduced in the highest-end quad-core Haswell mobile parts. As I understand it, eDRAM also helped to boost graphics performance by essentially increasing the effective memory bandwidth available to the chip -- and, in particular, the graphics processor.
With a new architecture, a more mature 14-nanometer manufacturing process, and eDRAM, the 15-watt Skylake parts with GT3 graphics could deliver substantially better graphics performance than the GT2 parts. That could potentially make the upsell to the higher-end graphics configurations worth it to some PC vendors for higher-end Ultrabooks.
The gains could be even more pronounced in higher-power notebooks
In the Haswell generation, Intel offered high-powered quad-core chips with either GT2 graphics or, as found in the 15-inch Retina MacBook Pro, GT3 graphics with an eDRAM cache. In the Broadwell generation, Intel still offers GT2/GT3 + eDRAM options. However, with Skylake, Intel is upping the ante.
From the various leaks, it looks as if Intel will be offering the high-performance Skylake parts in a GT2 configuration and a GT4 + eDRAM configuration. The GT2 part will have 24 execution units, while the GT4 parts will feature 72 execution units as well as 128 megabytes of eDRAM, similar to the Haswell/Broadwell parts.
The difference between the GT2 model and the GT4 + eDRAM part seems as though it should be larger than the difference between the Haswell/Broadwell GT2 parts and their respective GT3 + eDRAM counterparts. This could make the GT4 + eDRAM parts more attractive to PC vendors than the GT3 + eDRAM parts in the Haswell/Broadwell generation were.
Why upsell is important
The PC market, by Intel CEO Brian Krzanich's own admission, is a flat-to-down market over the long-term. In the absence of unit growth, it makes sense to try to add as much value to products as possible in order to maximize revenue. Intel's focus on improving integrated graphics shows that the company thinks there is an opportunity to do just that.
Ashraf Eassa owns shares of Intel. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.