The revolution in chip design announced by Intel this week is being seen as an attempt to see off a threat from Arm Holdings, the UK chip designer, which challenges its dominance in microprocessors.
The world’s biggest chipmaker by sales on Wednesday unveiled a breakthrough 3D structure for its next-generation processors that the US company estimated could give it a three-year lead over competitors.
Intel already has 80.8 per cent of the PC processor market, compared with 18.9 per cent for its rival AMD, according to figures released on Thursday by IDC, the research firm.
However, it has failed to produce chips power-efficient enough for use in mobile phones and tablet computers, where Arm-based chips dominate.
In particular, Apple’s iPhone and iPad handheld devices have used chips based on Arm’s designs, rather than Intel’s.
Arm is also moving into Intel’s core PC market. IDC predicted that more than 13 per cent of PC processors would be based on Arm’s architecture by 2015.
However, with Intel’s new design promising to cut power consumption in half compared with its current generation, a breakthrough into phones should be nearer.
The design’s introduction on chips with circuit widths of 22 billionths of a metre will go into mass production later this year.
“We’ve been asking what’s your road map to get into cell phones?” said Len Jelinek, semiconductor manufacturing analyst at iSuppli, the research firm.
Lee Simpson, semiconductor analyst at Jefferies, the investment bank, said: “This is Intel starting to advance into mobile.”
As early as next year, he said, customers such as Apple could be considering Intel chips for their devices.
Arm, however, made light of the threat. “There is no real surprise in the announcement,” said Ian Drew, executive vice-president of marketing at Arm. “3D technology has been talked about for a decade.
“Yes, Intel is the first to announce it, but there are lots of people following them quite quickly. We also need to wait and see how these chips will work in practice,” said Mr Drew.
Taiwan Semiconductor Manufacturing Company, the world’s biggest contract chipmaker and a pivotal manufacturer for Intel rivals Qualcomm, Nvidia, and others, said its chips would remain competitive with Intel’s even though it would not use 3D transistors until the 14-nanometre generation arrived.
The company said that while Intel would have more powerful transistors as a result of its new design, TSMC’s chips would have better interconnections and higher transistor density such that, “in terms of overall performance we won’t lag behind Intel”.
Shang-Yi Chiang, vice-president of research and development, said TSMC had worked on 3D transistors since 2003.
“If anyone is going to push Moore’s law to the furthest, TSMC will be there,” he said.
Roger Kay, analyst at Endpoint Technologies, said that to rival Arm-based chips, Intel may have to wait an extra generation and a further two years, when it can shrink circuitry to 14-nanometre widths.
“As far as being competitive with Arm, I think the 22nm generation may be close to par but maybe not at par and will certainly not be enough reason to uproot the established architecture,” he says.
“When it gets to the 14nm generation, it may have enough of an edge that the device makers and carriers will look at that.”
Arm shares fell 7.3 per cent on Wednesday on speculation about the Intel announcement.
They rebounded by nearly 3 per cent on Thursday. Many analysts took the view that Intel’s advance posed little immediate threat.
A bigger loser was Soitec, a French semiconductor maker that pioneered an alternative technology for dealing with increasingly small-sized chips.
Soitec shares have fallen more than 9 per cent since Wednesday.