More on Atom, 32nm, NAND, smartphones, SSDs, SoC, Larabee, AMD, NVIDIA, TSMC, Android, ASUS, Acer, and those "Mubadala guys"

Paul Otellini, the President and Chief Executive Officer of Intel, addressed a lunchtime crowd at the Goldman Sachs Technology & Internet Conference in San Francisco yesterday. Part 1 of this article can be found here.

Intel's strategy for Atom processors has always been to leverage its manufacturing strength. As new process geometries are developed, more transistors become available for use. Intel has always been able to integrate more functionality into its CPUs this way, and will continue to do so with memory controllers and graphics. Paul Otellini stated, "Instead of building performance, we are building integration".

AMD has recognized this fact, and did something about it by acquiring ATI. Otellini was critical of NVIDIA and its attempt to stick with the status quo. He mentioned the x86 compatibility of Larabee, Intel's many-core graphics product, as being a programming strength when it launches.

The P1269 32nm process is optimized specifically for System on Chip designs, and will enable a new generation of Mobile Internet Devices and smartphones. While 45nm is good, 32nm will enable Intel to get out of MID sizes with Atom and into smaller sizes for smartphones.

Otellini was particularly excited with this development, stating that "The majority of Intel's products in 5 years will be SoC". He also added, "The battle for smartphones will be fought first with netbooks".

"We all ride the Law," he said, referring to Moore's Law. Other companies do it as well, but Intel does it better.

Answering a question in regards to the future competitiveness of AMD, Mr. Otellini replied that "The Mubadala guys will want a return on their investment", referring to the purchase of shares by Mubadala Development and "The Foundry Company" spinoff with the Advanced Technology Investment Corporation, both owned by the Emirate of Abu Dhabi. Since the current agreement is for a cost plus contract, AMD's costs will inevitably go up.
It will either mean their prices will go up or their margins will go down. This affects their ability to compete on price, which is the only advantage they have right now. There is no way their production costs will go down.

Intel may provide limited foundry services to Sony, TI, and other companies going asset light. It may offer wafer services and semi-custom cores to some key customers, but Intel won't be competing with TSMC.

Mr. Otellini disclosed that NAND will be an important platform feature in terms of power management and cache. However, NAND itself is not an important product for Intel, and if it makes sense to purchase from another source rather than its IM Flash Technologies joint venture, they are prepared to do so. "NAND in the platform is strategic, NAND as a business for Intel isn't".

Intel is pleased with its momentum in SSDs, and will be moving to the high end as soon as possible with NAND flash.

Recently, LG and Intel announced MIDs and smartphones based on the Moorestown platform. Otellini said there would be more Tier 1 OEM wins that will be announced in the near future. Intel will make also make an announcement about licensing 3G technologies soon.
"The limit for smartphones isn't hardware, it's software", Otellini said, explaining that ARM processors are different depending on who makes it. "It's not like the PC where you have a (software) ecosystem to support it".

Intel is still working on its Moblin open-source project, optimized for Atom in netbooks and MIDs. Mr. Otellini also revealed that there are a lot of Intel customers working on netbooks using Google's Android operating system. He joked, "Vista runs on Atom, ...It's just no one uses it".

"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997

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