AMD isn’t going after the mobile Internet device market that Intel and other chip vendors are eying. AMD’s senior VP and chief marketing officer, Nigel Dessau, told eWeek, “What we are saying is that we are a smaller company and we have to focus on what we do well at this point. We are watching that segment rather than playing in it, but as it matures we’ll see where it goes.” Sounds like a good plan for AMD, which already has chips that might work for Netbooks and needs to focus on righting itself.

Yesterday afternoon, Intel’s CEO Paul Otellini seemed a little hazy on the future home for Intel’s Atom processor during the chip maker’s quarterly earnings call — a fact I don’t find all that surprising since the netbooks or mobile Internet devices the chips are designed for exist only in a marketer’s imagination and failed product implementations.

Otellini was excited about Atom, calling demand for the chip” robust,” but analysts pressed Otellini about Atom’s end market and whether the chip would cannibalize Intel’s low-end Celeron processor. The Celeron ranges from speeds of 2.13 GHz to 3.6 GHz, and is faster than Atom’s 1.8 GHz or 1.6 GHz. Otellini’s responses were less than a ringing endorsement of the chip. “[Atom] is less than a third of the performance of our Centrino (high-end mobile processor),” said Otellini. “You’re dealing with something that most of us wouldn’t use.”

Wait a second. Just weeks ago before the Computex trade show in June, Otellini told the Financial Times he anticipated a $40 billion market opportunity for Atom chips over the next few years. If most of us aren’t using these low-end chips, then who is? Otellini envisions the Atom chip for small computers in emerging markets that happen to have IP-based voice, but in late 2009 Intel will launch an Atom chip for smartphones. In emerging countries, a lot of computing is already carried out on cell phones, begging the question of where Intel’s demand for Atom is coming from. Will those products actually succeed?

As for cannibalization, Otellini said, “We do not see [Atom] replacing Celeron. If you look at the netbook products being built around Atom, they’re all lower-priced, lower features, smaller screen size notebooks aimed at first-time buyers or the second, third or fourth machine in a household. We don’t see any cannibalization.”

So Atom chips are designed for slow web access on cheap, portable machines that will act as the backup computer in my home. Wait, I have one of those already. It’s called a smartphone and plenty of companies already make processors for that market.

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Mobilize — Mobile Web Today and Tomorrow

For a while there, covering the chip industry was like covering a race run by a rabbit and a cheetah. AMD was the rabbit, while Intel — with its much larger market cap and greater profits — was the cheetah. Evey now and then the rabbit would fool you into thinking he was going to pull ahead, but we all knew who was going to win. In the past few years, however, two things have brought more runners and more diversity to the course: a challenge to the x86 architecture, and the iPhone.

I could probably find a way to credit the iPhone for changing the furniture industry if I tried hard enough (it could be the new Six Degrees of Kevin Bacon game for tech journalists.) But in this case the iPhone pushed the real Internet — as opposed to a carrier-defined portal — out to mobile consumers and showed them how compelling such access could be. That made clear to carriers that data usage, which was already on the rise, could become a huge revenue booster if consumers were given the right type of devices. Which prompted chip makers to see gold in the form of the 33.2 million high-end handsets sold around the world.

That pushed the chip world into viewing these devices as mini computers requiring their very own processors. Obviously these processors need to be small, use very little energy and still cycle fast enough to load and display web pages, pictures and other mobile computing tasks. Chip firms had been thinking about those functions for years, but the success of the iPhone showed how important the mobile computing experience could be. So Intel begat Atom, a chip designed not for a mobile phone but for a smaller laptop that Intel calls a mobile Internet device.

Other chips firms aren’t standing still, either. Via Technologies, which for a long time had the handheld computer market to itself, is refreshing its line of chips. Qualcomm now has Snapdragon, and Texas Instruments is offering OMAP chips. The dark horse in all of this frenzy comes from Nvidia’s Tegra offering, which is really compelling in demos. But Nvidia has an uneven record of supporting its products, so it remains to be seen if the real-life experience can meet the high expectations set by the demos.

Nvidia is also making my chip coverage fun with its efforts to knock out the x86 architecture. Intel and AMD dual-, triple- and quad-core chips will never go away, but both Nvidia and IBM are pushing credible alternatives for high-end processing. Nvidia’s dressing up its graphics processing chips (GPUs) to run scientific queries, visually intensive tasks and repetitive problems than can be done in parallel, such as video decoding and encoding. The influx of digital media is creating a need for such capabilities in an increasing number of data centers.

IBM, meanwhile, is pushing its Cell processor — which was designed with Sony and Toshiba eight years ago for the PlayStation 3 — for enterprise servers and high-performance computing. In many ways it’s attacking the same problems Nvidia’s GPUs are, with encoding and Monte Carlo simulations showing off the Cell’s specially designed, nine-core architecture. IBM may have an advantage over Nvidia because of its enterprise focus. It offers an enterprise-ready Cell-based blade server, while Nvidia sells its chips to firms such as Atrato and Rackable for corporate consumption.

So the two-company race that was never all that competitive has turned into several races with multiple players. Ironically AMD doesn’t have a mobile processor yet, and isn’t really pushing its GPUs into jobs other than running graphics. Perhaps it believes that if it stays the PC course it can pass the cheetah while Intel focuses on Atom and smaller devices.

Parallel processing isn’t just for supercomputers or GPUs anymore. Computer makers are throwing multiple cores at everything from servers to your printer. But the focus on horsepower misses a crucial problem associated with adding more processors. To really take advantage of them, you have to rewrite your code.As anyone who’s ever hosted a demolition party well knows, you can only throw so many workers at a problem before people start to linger at the edges, swill your alcohol and generally stop helping. You need not just manpower, but a good way to organize those workers so that someone, says, preps a drop cloth before your walls get taken out. And others prep for cleanup while the plaster is flying.

Silicon doesn’t tend toward drunken destruction, but if you’re putting the cores in place, it would be great to give them better instructions. Otherwise the promise of performance is just a promise, which is why Microsoft and Intel recently pledged $20 million to two universities trying to figure out an easy way to translate the billions of lines of code into an instruction set for multicore chips.

Others are pushing Erlang as a potential solution to parallel programming, while those in the supercomputing industry are warning of a performance drop caused by applications not keeping up with the cores. Software startup VirtualLogix is trying to use virtualization software to govern how multicore chips run applications by making the programs think they’re running on one processor.

Last week, during the launch of the iPhone, Steve Jobs told the New York Times that the next generation of the Apple OS will not focus on new features, but will instead solve the problem of writing software for multicore processors. Apple has code-named the technology Grand Central, and based it on a programming language called OpenCL. It will parallelize C programming languages for graphics processors.

Besides investing millions of research dollars into the search for a magic compiler or reviving an older language, chip vendors are coming up with stopgaps. Unfortunately these stopgaps are focused solely on their own silicon. Nvidia has released a tool called CUDA to help translate C languages into parallel instructions that can be used by Nvidia’s GPUs for scientific computing. (Apple’s OpenCL looks similar to CUDA.) And AMD also has its own effort, called Stream.

Freescale on Monday announced a set of multicore embedded processors that come with software support in the form of a simulator that ships before the chips do. As a result, users can start their development efforts and test their multicore code weeks ahead of time. “Customers are not looking for suppliers to offer them a chip and then leave them to program it themselves,” explained Steve Cole, a systems architect for Freescale. “There’s a certain amount of support and market knowledge that we need to have to help our customers.”

With all the work it takes to rewrite code, it’s no wonder everyone from startups to established companies are desperately searching for the programming equivalent of a Babel fish to solve the problem. The one that succeeds will be responsible for taking computing to its next jump in speed.

Solarflare Communications, a chip startup in Irvine, Calif., has raised $26 million in a third round of funding. That brings the total the company’s raised to $126 million, which is a lot of money for a chip startup, even when you consider that the amount includes money raised by Level 5 Networks, which Solarflare acquired in April 2006. But the startup is hoping to use that money to attack a big problem in the data center at prices lower than the current technology offers. And if it succeeds, it’ll make computing faster and data center operations more flexible.

Like many other communications chip companies, Solarflare is working on a way to deliver 10 Gigabit Ethernet over copper, which is cheaper than delivering it via fiber. That enables the high-speed transport technology to move outside of the telecommunications networks, where companies such as Infinera are already pursuing 100 Gigabit Ethernet over fiber, and into mass adoption in the data center. Getting the technology into servers at a reasonable cost would create a market 10 times bigger than that of networking switches.

Others chasing mass adoption of 10 GigE on the server side are Intel and Broadcom, which like Solarflare, have controller chips. Broadcom and Solarflare also have PHY chips sampling with customers. Solarflare CEO Russell Stern plans to integrate the PHY with the controller chip in 2009, beating Broadcom to the market. He will use some of the funding for that purpose.

It’s likely Broadcom will end up attempting an integrated 10 GigE over copper chip as well. Broadcom doesn’t talk about its chips until they’re sampling, but the company did make a mint by cornering the market for integrated 1 Gigabit Ethernet chips for servers. However, success for Solarflare or Broadcom is probably three years out and depends on creating an energy-efficient chip at the 32 nanometer process node, according to Bob Wheeler, an analyst at The Linley Group.

Power consumption is a big challenge for these chips because unless it’s managed properly, they run too hot for servers and switches. And because technology doesn’t stand still in the data center, where virtualization and ever-increasing amounts of data are screaming for fatter pipes, hybrid forms of networking technologies that mix fiber or Fibre Channel with Ethernet are emerging to bridge the Gigabit gap between servers and networking equipment. Broadcom has several products that take advantage of such a hybrid networking environment. Startups such as Arastra and Woven Systems are also in that sector, and may see gains at the expense of a unified 10GigE world, which means Solarflare’s market opportunity could fragment if cheap, integrated 10 GigE takes too long.

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The Federal Trade Commission, after two years of looking into allegations that Intel has behaved anticompetitively in the microprocessor market, has decided to act, announcing a formal probe. At issue is whether Intel offered PC makers rebates to use its chips instead of AMD’s. Intel issued a statement in response.

The company believes its business practices are well within U.S. law. The evidence that this industry is fiercely competitive and working is compelling. For example, prices for microprocessors declined by 42.4 percent from 2000 to end of 2007. When competitors perform and execute the market rewards them. When they falter and under-perform the market responds accordingly.

In Austin, the Intel fund at Dell was an open secret, although Dell eventually opened the door to AMD. While AMD may be tempted to applaud this and the $25.4 million fine imposed on Intel by South Korea, the FTC probe won’t lead to action anytime soon. The government moves slowly and the coming change in administration won’t help speed it up.

Wi-Fi is the coax of the wireless world in that it’s cheap, is in a lot of homes and is familiar to consumers. So today’s launch of Ozmo Devices, with backing from Intel and Belkin, should strike not a small amount of fear into the hearts of Bluetooth SIG members. Ozmo makes software that uses the existing Wi-Fi chips inside a computer or laptop and allows that laptop to communicate with battery-operated peripherals containing its chip.

From the user perspective, this will eliminate USB dongles for communicating with your wireless keyboard, mouse, etc. It also allows for applications that Bluetooth, with its limited bandwidth, can’t do well, such as sending uncompressed stereo to wireless speakers.

Ozmo doesn’t currently have peripherals on the market, but Belkin has said it plans to use its chips in products later this year. Intel is also pushing Ozmo as part of its Cliffside project, which aims to build a chipset that can distinguish between Wi-Fi signals for local area networks (LANs) and personal area networks (PANs). Cliffside won’t only pick a fight with Bluetooth, but will be a blow to the underdogs in the wireless USB space that are seeking to use ultra-wideband as a wireless standard for sending large files across relatively short distances. If Intel starts pushing Cliffside in a big way, expect to see some PANdemonium.

No one knows exactly how big the market for mobile Internet devices will be, but the major chip makers are betting it will be huge (it’s one of the reasons they’re making chips for mobile devices at 45 nanometers.) We’ve covered efforts by Intel, Qualcomm, and Via Technologies to get their chips into devices sized somewhere between a smartphone and a PC, but Texas Instruments wants to play, too.

TI formalized its MID effort, based on its own OMAP architecture, last month. It’s entering this market with its third generation of OMAP multimedia processors, which were designed four years ago specifically to fit into smartphones. The second-generation chips are currently in the Nokia 800 and 770; the third-generation chips that underlie the formal MID group will be in an undisclosed number of products by the end of the year.

TI’s chips will compete directly with Qualcomm’s Snapdragon chipset and Intel’s Atom chips. Comparatively speaking, TI’s chips show a greater flexibility for the end products. The power-sipping (at 500 mW-750 mW) 800 GHz MHz processor is slower than both Qualcomm’s and Intel’s efforts and requires less power than Intel’s Atom processors, which can require up to 2.4 watts. Ramesh Iyer, a MID product strategy manager with TI, says the lower clock speed is a conscious decision to reduce the power consumption; combining several types of cores with TI software allows for a higher utilization of existing megahertz, he notes.

As products containing chips from competing vendors hit the market, my hunch is that TI’s might be the best when it comes to general purpose use and battery power, followed by Qualcomm’s Snapdragon, which will also be battery-friendly and perhaps perform better than TI’s in general purpose use. Device specs for MIDs based on Intel’s Atom processor are larger, but the x86 architecture might win converts because it’s familiar and plenty of applications are designed for it. And that raises the very legit question of what role the operating system will play in how MIDs are used. I’ll get back to that in a few posts.