ARM appears likely to dominate microprocessor architecture.
- Ars Technica: Windows 8 to come in ARM, SoC flavors
- Ars Technica: All this has happened before: NVIDIA 3.0, ARM, and the fate of x86
- The author's comment on the latest Ars Technica article
- An article from “geek.com” (from 6th January) with a video showing a side-by-side comparison of ARM Cortex A9 vs. Intel Atom
Reuters article about AMD quoted in Skype conversation, 13/Jan/2011:
“People may increasingly depend on tablets and smartphones—instead of PCs—as their main point of contact with the Internet, experts say.”—Reuters
AMD and Intel are both having a difficult time competing against lesser-known ARM. Inherent technological trends (including the famous Moore's Law) are pushing increasing proportions of the market toward ARM's traditional market segment, in which ARM enjoys a significant headstart on Intel and AMD with development and intellectual property. ARM's microprocessor designs power over 95% of the world's smartphones including Apple iPhones and iPads, Blackberry and Windows Mobile, Samsung etc… The whole market segment is tooled up and trained for working with ARM, with strong pressure from ARM's power consumption advantage for the industry to continue favouring ARM designs for portable devices.
ARM's fundamental advantages
Regardless of Intel's progress in developing power-saving semiconductor hardware, ARM will retain a fundamental advantage over Intel x86-based processors through ARM's simpler and more power-efficient instruction-set and design philosophy.
Intel is working hard to erode ARM's power-efficiency advantage through industrial leadership in the development of many new semiconductor manufacturing technologies; however, ARM's strategic partnership with IBM, another industrial giant in semiconductor fabrication (as part of a broad industrial alliance) for the development of a standardised 14nm semiconductor manufacturing process for the fabrication of ARM processors and SoCs will help to ensure that ARM will not fall far behind Intel in this important field. Intel will continue expending significant amounts of money on research and development to retain their lead in process technology so as to neutralise ARM's fundamental design advantages as far as they can; but with process technology rapidly approaching the CMOS endpoint, Intel's CMOS research advantage will soon suffer from a law of diminishing returns. The antiquated and excessively complex Intel x86 instruction set, once an asset of Intel, is becoming a net liability for Intel, yet this is a liability Intel cannot easily offload without losing even more market-share to ARM in semiconductor design and associated intellectual property. Other fundamental advantages conferred on ARM by their superior (simpler) instruction-set architecture include:
- Simpler design requirements for optimising compilers (so that good software development tools cost less to develop and are likely to produce more reliable and more efficient code),
- Simpler methods of verifying the correctness and security of ARM's comparatively open designs; meaning less chances of a product recall or security debacle.
- A less intricate and less complex end-product requiring less energy and less raw materials for its manufacture. Superior manufacturing yield.
ARM's strategy of building broad and equitable industrial partnerships (e.g. in semiconductor fabrication) effectively neutralises Intel's scale and cash advantage and courts the attention of customers who like the inherent economy and security of a market of multiple competing suppliers with compatible products (and who dislike the monopolistic practice of vendor lock-in). ARM's strategy (supported by an increasingly mature software-based design technologies) of effectively decoupling the semiconductor design and fabrication industries into separate markets confers on the ARM ecosystem the strengths of any or all of its participants.
By contrast, AMD's market segment is under pressure from two directions:
- Pressure from ARM; within the fast-growing market for low-energy processors (high processing power per watt or per dollar);
- Pressure from Intel; who have the advantage in designing and fabricating processors with the fastest raw processing speed per core or per package.
The only thing going in AMD's favour at the moment is their ATI GPUs may be supported by the recent standardisation on “OpenCL”. Because of their excellent personnel and strategic position, ARM is likely to continue growing rapidly, extending their long-term trend of share price increases.
Conclusions: long-term outlook
Unless Intel fundamentally changes their design strategy, in the long term, they cannot win this competition with ARM for the microprocessor design market, despite their substantial cash and research assets.
Market share for x86-based designs may grow more slowly in the future and will suffer from shrinking profit margins; eventually squeezing AMD out from the middle of the CPU design market (the author anticipates that by the mid 2020's, x86-based designs will cease to retain a significant market share in ordinary people's everyday computing needs, so that x86 will become a niche market for legacy or specialist hardware). AMD-ATI's rival NVidia (the inventor of the GPU) has already become part of the ARM ecosystem with their new [ARM-CPU + NVidia-GPU] components, and Intel has responded to this move with anti-competitive practices against NVidia and Apple that only serve to underline Intel's own assessment that ARM's ongoing emergence into mainstream computing represents a significant threat to them.
Buy/hold: ARM ↑
Shorten: AMD ↓
Draw your own conclusions about: Intel (note FTC lawsuits and significant market disruption) and NVidia (ongoing lawsuits and market access issues have been depressing NVidia's outlook, but these issues might be mitigated by the expected emergence of a fast-growing market for ARM-based NVidia products).
Disclosures
At the time of writing, the author holds no financial position in any of the companies discussed in this article. The author is not professionally qualified in any way to advise on stocks and shares; but does have a degree in computer science earned at Cambridge University and a strong personal interest in microprocessor technology, with almost two decades of occasional reading in industrially relevant journals.
Updates
May 4, 2011
Ars Technica: GPU market mid-2011: NVIDIA faces transitional challenge arising from dispute with Intel & the rise of the integrated GPU, AMD and Intel set to gain within GPU market.
—AMD's decision to buy out ATI was very smart. Overall outlook for AMD is stable.
May 30, 2011
Intel executives opening up publicly to the possibility of manufacturing microprocessors based on ARM architecture:
Ars Technica: Intel exec throws fuel on the “Intel to fab Apple chips” rumor fire
Reuters: ARM to “take seriously” any Intel plan to make chips for rivals
Jun 3, 2011
Microsoft details specs for Windows 8 tablets, shows off hardware
—significant technical progress has been made to implementing Windows 8 on ARM. The pace of progress may give early indications that the process of recompiling Windows applications for ARM will be relatively straightforward.
Jun 14, 2011
Jun 17, 2011
Ars Technica: ARM server startup tries jumpstarting datacenter software ecosystem
Oct 21, 2011
Ars Technica: Can AMD survive Bulldozer's disappointing debut?
Oct 21, 2011
Ars Technica: ARM's new Cortex A7 is tailor-made for Android superphones
—note that Android is the only major smart-phone operating system supporting Intel's competing designs. This new development keeps ARM well ahead of Intel within the only part of the market Intel can presently use as a bridge-head for a belated entry into the smart-phone market.
Oct 25, 2011
Oct 26, 2011
Citrix claims it will make virtual desktops cheaper than real ones
—“The HDX system-on-a-chip architecture is initially designed for ARM-based chips but will be expanded to x86.”
Feb 10, 2012
Sep 17, 2012
AMD's stock price plummets amidst CFO resignation — in light of AMD's apparent difficulties, Intel's outlook may brighten in the medium term as Intel expands further into territory vacated by AMD's retreat.
Oct 29, 2012
AMD announces ARM-based Opteron CPUs due to launch in 2014 — could this move offer AMD an innovative way out of the strategic quandary we have discussed, or, is this a desperate PR gambit from AMD to shore up their beleaguered stocks and shares? Will AMD's new ARM-based processors come to market on time to prevent AMDs demise? Only time will tell… Either way, it appears that AMD is planning their exit from the x86 ecosystem, leaving Intel to maintain & service an instruction-set they tried to abandon ten years ago for IA64!