Intel Hits "Thermal Wall" in Chip Making, Disrupting Dominant Approach

Strategic Insights -

The world's largest chip maker, Intel Corporation, has acknowledged hitting a "thermal wall" on its microprocessor line, forcing it to change its product strategy and abandon two advanced chip development projects. Intel's decision to shift from pursuing higher clock speeds to using multiple processors on a single chip, known as dual-core processing, reflects the challenges of overcoming heat generated by the constant on-off movement of tiny switches in modern computers. This thermal wall has disrupted Intel's dominant approach to chip making, which relied on continually increasing clock speeds to maintain its market lead.

Key Takeaways:

  • Intel has publicly acknowledged hitting a "thermal wall" on its microprocessor line, leading to a change in product strategy.
  • The company is abandoning two advanced chip development projects, code-named Tejas and Jayhawk.
  • Intel is shifting to a dual-core processor structure, obtaining more computing power by stamping multiple processors on a single chip rather than straining to increase the speed of a single processor.
  • This approach reflects the company's challenges in overcoming heat generated by tiny switches in modern computers.
  • Intel has been struggling with escalating heat problems that threatened to cause its chips to fracture at extreme temperatures.
  • Its main rival, Advanced Micro Devices Inc. (A.M.D.), has seen a rare window of opportunity at the top of its chip line.
  • A.M.D. reported that for the week of April 24, the percent of personal computers sold using A.M.D. chips had surpassed those using Intel chips, with A.M.D. at 52% of PC's sold versus Intel at 47%.
  • Intel faces a formidable challenge in revamping its chip design, with analysts warning of potential pain or damage to the company's situation.
  • Rivals like I.B.M., A.M.D., Sun Microsystems Inc. and others may eventually face similar challenges driven by pushing the envelope in advanced manufacturing processes.
  • I.B.M.'s executives acknowledged that they, too, had been getting disappointing yields from their most advanced manufacturing process.

Statistics:

  • 52% of personal computers sold using A.M.D. chips as of April 24, versus 47% using Intel chips.
  • Intel's Prescott microprocessor for PC's consumed 40 watts more than a similar chip from A.M.D.
  • 90 nanometer manufacturing techniques are becoming increasingly porous, permitting electric current and heat to cascade out even when they are switched off.
  • Intel's decades-long reliance on complex-instruction set computing (CISC) may have reached its limit.
  • The company's new dual-core approach offers room for growth, permitting greater advances on energy consumption for future chips.

Sources:

  • "Intel Hit By 'Thermal Wall' in Chip Making, Disrupting Dominant Approach" by John Markoff (no date provided)
  • "A.M.D. Gains Ground on Intel as Chip Sales Slow" by Steve Lohr (no date provided)
  • "I.B.M. Confirms Problems with Advanced Manufacturing Process" by no author (no date provided)