Wednesday, June 1, 2011

Intel steps up its pace: Interview with Navin Shenoy, general manager, Asia-Pacific region for Intel

One major topic at Computex Taipei this year is the rise of mobile computing devices built on the ARM platform. This trend is pitting multiple semiconductor firms against computing industry giant Intel, which recently responded to the challenge with some key initiates announced during its Analyst Day in May.

Just before Computex, Digitimes had the opportunity to chat with Navin Shenoy, general manager, Asia-Pacific region for Intel to discuss the company's Analyst Day and its future plans. The following are some of the excerpts of the interview.

Analyst Day changes to roadmap

The overall context of the current business environment we see is that there is continued unprecedented demand for computing, from the device side including PCs, all the way to the data center. We think Intel is well-positioned to capitalize on that demand and our strategy is to lead across the three pillars of computing that we see, which are energy efficient performance, Internet connectivity and security; these areas are becoming increasingly important. And to achieve these goals we believe we are armed with the best product line we have ever had in our history and as we look forward we are going to add to that product line with the major enhancements.

During our recent Analyst Day we made two major high level changes to our roadmap and these set of changes essentially reinvent the PC, make it much more like a CE device with features such as being ultra-thin, ultra-secure and ultra-responsive. New features will be added such as instant on, always on, always connected, and with 10 hours of battery life. There will be major improvements in the graphics as well. Basically the changes are at the highest level and combine all the best attributes of the tablet with all of the performance that people have come to expect from the PC. That is sort of the biggest high-level change.

The other major change is on the system on chip (SoC) side, which will affect the tablet and smartphone areas. What we announced there is essentially an acceleration of our SoC development strategy.

Normally we have a new process technology every two years and we now plan to accelerate that to every one year. This will start from 32nm products (Saltwell) next year and then in 2013 we would have 22nm (Silvermont) and then in 2014 we would have 14nm (Airmont),essentially moving much faster than Moore's law - in fact twice as fast for our SoC products - substantially improving the performance over that period of time and substantially improving the graphics.

The way to think about this shift is that we are making a major shift to ultra-mobility and a major shift to ultra-low power.

Not the first strategy change for Intel

Every 10 years or so we make a major change to the way we think about our roadmap. In the mid-90s we had a big push around multimedia with Pentium MMX and in 2003 we had Centrino to basically create the laptop market. Now we are making a big push into ultra-mobility for PCs and new form factors such as tablets and smartphones.

Obviously all of this builds on our key strengths, with perhaps the most important being our process technology lead. For example, our recently announced 22nm 3D transistors, our Tri-gate transitions, are really revolutionary building blocks for building products. They provide us with unprecedented increases in performance at the same power.

Normally, companies have to compromise between power and performance, but what we've been able to do with this new transistor is the ability to deliver 37% more performance at the same power envelope, or if you hold the performance constant we can deliver half the power. So we have many options to optimize our products using these new 22nm transitions.

What this gives Intel is the ability to scale from milliwatts for phones, all the way up to megawatts for data centers. We think that would be a huge advantage for us over the next several years.

Influence in Asia

This change has already started and we will see the first manifestation of products coming out in the second half of this year - new laptops that are ultra-thin and ultra-responsive and with much more battery life. Using our Sandy Bridge products we are working with our partners in Taiwan right now and obviously in 2012 it will get better with Ivy Bridge and in 2013 it will get even better with Haswell.

There are a number of activities under way in Asia, in particular in China, Taiwan and Korea, to deliver these new mobile devices. Think about a cross between a notebook and a sleek tablet. Those two worlds coming together - thin and light at mainstream laptop prices with instant on, always on, always connected, and with both a keyboard and a touch screen interface. There will also be new kinds of sensors built-in.

On the consumption side in Asia, there are a number of huge emerging markets here. You'll see a lot of these products consumed in Asia, not only designed in Asia. Already two out of three PCs sold worldwide are sold in emerging markets. We think emerging markets in Asia in particular will grow at a very healthy rate, well above double digits and with some markets growing well above 20%. This is driven by the fact affordability continues to come down.

About 15 years ago it would take a year of income for somebody in India or Southeast Asia to buy a PC, now it takes only a month or a month and a half of income, so major change in terms of affordability allow continued strong growth in Asia in terms of consumption.

Taiwan ODMs and new product cycle

ODMs are extraordinarily good at winning in transition. Their ability to quickly jump on new trends is unprecedented. Their ability to commercialize products is well proven over many decades. Taiwan is well equipped to take our roadmap for PCs and tablets, maybe less so for phones, and commercialize them into systems for the market.

A lot of work will be needed on form factors, new materials, new types of IDs, as the look and feel of the computer matters more and more. Thinness is also becoming more and more important as ways of optimizing battery life. And Taiwan ODMs are fantastic at driving those kinds of innovations

There will be a lot of developments for firmware and software related areas as well, to create new capabilities like instant on and always remaining connected to the Internet. I think all of this innovation will be really good for Taiwan and you'll see that nowhere else in the world can commercialize it as quickly as Taiwan can.

PCs vs smartphones

It is sort of trendy to talk about one device replacing another, but that is not what we have seen. Our view has always been that these devices will coexist, that you'll see an explosion of multiple types of computing devices in peoples' lives. There is basically a plethora of computing devices that people use to connect to the Internet, including smartphones, PCs and TVs. Even ATMs and digital surveillance cameras are being connected to the Internet. With all of these devices that are emerging and with this explosion of devices connected to the internet, I really don't think there will be one device that fits all needs for a user. I think it is a fallacy to think of it as an either/or proposition. Most people will use different devices for different needs, at different points in their day and at different points in their life.

Even tablets and PCs will coexist. The device is additive though we do expect that on the margins there will be some cannibalization. Then again, nobody really knows how big the tablet market will be.

However, we do know that there is space for some other type of device and there is going to be a tremendous amount of experimentation here. The market will see new devices that will feature the best of the laptop and the best of the tablets sort of merged together. You'll see devices that have a keyboard and have a touchscreen, have a convertible form factor - a type of slider form factor. You are already seeing some experimentation in the market

Comments on the PC market

The corporate market for PCs is very robust and very strong. The server market is very robust. There is a massive build-out happening in the data center and that is happening as we speak. In terms of consumer PCs, we spoke about this at our last earnings. The US and Western Europe were a little bit soft last quarter after many years of strong growth. But consumer demand is still very strong in the emerging markets. And we still maintain that the PC market will grow in the low double-digits this year. Remember, we have a whole set of innovative new products coming out now around Sandy Bridge. We think this will create excitement in the market and can help rejuvenate demand in certain segments.

ARM and Android

In terms of the question, "Will Intel consider developing on the ARM platform?" the answer is no. For Intel, we need to develop the best microprocessor we can and have a business model to support it, so that we can get paid. We think that with Intel architecture we have a fundamental advantage in performance and over time we will be very competitive on power, especially as we move to new transitions. So if we are at the same or better power and at better performance, with best-in-class chips, then there is no advantage of going to ARM. We would simply be beholden to them. We would have to pay them royalties and we would have lower profits. Why would we do that?

As for Android, we are in the process of working with Google and we have access to the honeycomb tablet operating system. We are in the process of optimizing honeycomb for Intel's SoC architecture for products like Oak Trail and Medfield. As we work through the optimization, we need to make sure we have an advantage and that's what we are working on

Over the long haul our power will be very competitive and we will continue with our performance advantage. We will also have new capabilities that aren't available on arm, such as WiDi (wireless display) on a tablet to deliver content from your tablet and wirelessly to your big screen TV. We'll have embedded security and more manageability features such as remote management that enterprises want. Many of the features we have on our laptops we will bring to our tablets. We'll have the ability to run all operating systems, including Windows, Android, MeeGo and all OS' will include legacy code.

Profiting from mobile computing market

If you look at the market in a business way, the number one silicon vendor today in terms of profits based on tablets on smartphones is Intel. And by that I mean if you look at the mobile market, for every 600 smartphones that are sold and every 122 tablets that are sold, this creates the sale of a server and you could imagine that Intel margins and profits for our servers are quite healthy.

We are benefitting from the build out of smartphones and tablets more so than any other silicon vendor even if we are not inside the smartphones or tablets because the real money is in infrastructure. We are currently seeing a boom in our data center business as a result of strong demand for mobile devices.

Of course we want to be on both sides of that. We want to be on the data center side and the device side and we have an aggressive roadmap to be competitive.

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