SAN FRANCISCO -- With a greater sense of urgency than perhaps at any time in its 10-year history, the Intel Developer Forum kicked off Tuesday morning in San Francisco. The biannual gathering of computer programmers, business partners and customers who build products on Intel ( INTC) chips comes as the Santa Clara, Calif.-based company has seen its once-unparalleled technology leadership, and its share of the microprocessor market, under siege by rival Advanced Micro Devices ( AMD). On Friday,
Intel warned Wall Street that its sales in the current quarter could be as much as $500 million short of its initial projections. But with a slew of new technology slated for release later this year, Intel's executives appeared confident that the company would soon regain its luster. By the end of the year, more than 85% of all Intel server products will feature dual-core processors, said Pat Gelsinger, the head of Intel's digital enterprise group. And 70% of the company's overall product lineup, including desktop and laptop chips, will have dual cores by year's end, he said. A new chip microarchitecture, which the company officially christened the Intel Core Microarchitecture at the event, will deliver even more important technological innovations. The common thread across Intel's new technology push is its commitment to energy efficiency, said Chief Technology Officer Justin Rattner. "Energy is on everyone's mind. It's the next frontier," said Rattner, who compared the tradeoffs that chipmakers now must make between energy consumption and performance with the challenges facing the automobile industry. Microprocessors based on Intel's new technology and slated for release in the second half of the year represent the first fruit of the effort, said Rattner. Conroe, the code name for Intel's forthcoming desktop processor, will deliver a 40% performance boost while consuming 40% less energy. Rattner did not specify the benchmark to which the metrics were compared. And Woodcrest, Intel's forthcoming server processor, will offer an 80% performance boost with a 35% reduction in power, according to the company.
Rattner pointed to the overall PC platform, rather than simply the microprocessor, as the next big opportunity to achieve greater power efficiency. Standing next to a prototype that looked like a science project, Rattner demonstrated how Intel is exploring techniques that affect the entire PC motherboard, such as the enabling of PCs to go into extended idle mode, which could cut power consumption by half. Absent from the podium was Intel CEO Paul Otellini. In his stead, the chipmaker's top brass delivered a series of speeches detailing Intel's technology roadmap. Also scheduled to speak Monday were Sean Maloney, the head of Intel's mobility division, and Don MacDonald, who runs Intel's digital home group. Rattner acknowledged that the company has been under "intense competitive pressure," but said that the organization has not lost its edge. "Knowing what I know as CTO, I can't think of another company that I'd rather be part of," said Rattner. Technology and operational issues have put pressure on Intel's business over the past 12 months. Intel was slow to release dual-core chips for servers: The company's first such product was released in October 2005, about seven months after AMD launched its dual-core Opteron. Intel also overhauled its product plans in October, scrapping certain processor designs -- a move some analysts viewed as a sign that Intel believed that its lineup was not competitive enough. Though Intel is still by far the PC industry's dominant microprocessor supplier, AMD has steadily chiseled away at Intel's market share. In January, Intel executives acknowledged that the company may have lost a point of market share to AMD during the fourth quarter. Friday's profit warning blamed the latest sales shortfall on continued share loss and weak demand in the PC market. Intel shares have been hovering around their 52-week low of $19. 85 for the past month. They closed Tuesday's regular session down 24 cents, or 1.2%, to $20.06, and recently lost 2 cents after hours.
But according to Intel's management, the company's manufacturing prowess, particularly the one-year lead it claims to have over AMD in producing chips with new, 65-nanometer circuitry, will put it ahead in terms of technology and costs. "Sixty-five nanometer allows us to do dual core at a cost structure of single core on 90 nanometer," said Gelsinger. The company also said it was on track to deliver a Quad-core processor in 2007, although it wouldn't say what ratio of the company's products will be quad core in 2007. Gelsinger acknowledged that significantly increasing quad-core shipments depended on the company's transition to chips with 45-nanometer circuitry, also scheduled to occur in 2007. Beyond quad-core chips, however, Intel signaled that it would probably not be doubling the number of cores again in 2008. Until the software community catches up and develops multithreaded applications specially tailored to take advantage of the new technology, there is no point in delivering mediocre products simply for the sake of putting more processors on a single die, said Rattner. "It's really time to get on the multithreaded train," he said.