Can Anything Cure Intel From ARM Fever?

Before you go, we thought you'd like these...
Before you go close icon

Another day, another front that ARM Holdings (NAS: ARMH) is assaulting. Intel (NAS: INTC) already has plenty of arenas to defend; we might as well add another on to the growing list. Not only does the chip Goliath need to try to hold on to its lead on the server and laptop markets, but it now also has to worry about ARM-based supercomputers.

NVIDIA (NAS: NVDA) has announced that the Barcelona Supercomputing Center (BSC) is now developing a new hybrid supercomputer that uses NVIDIA's quad-core ARM-based Tegra 3 CPUs alongside NVIDIA CUDA GPUs. It is the world's first, and it's probably not the last. Using the combination promises to improve performance without tacking on extra power consumption.

The projects leader, Alex Ramirez, says, "In most current systems, CPUs alone consume the lion's share of the energy, often 40% or more." Since the new architecture uses energy-efficient ARM-based chips, the project hopes to achieve a fourfold to tenfold increase in energy efficiency by 2014.

The BSC's long-term goal is to deliver next-generation performance and use 15 to 30 times less power than current supercomputer architectures.

This follows up an announcement last month of a similar hybrid supercomputer in the works. That one is being built by Cray (NAS: CRAY) and will use thousands of Advanced Micro Devices (NYS: AMD) CPUs matched with NVIDIA Tesla GPUs. The head of NVIDIA's Tesla unit, Steve Scott, says that adding one graphics chip to a supercomputer can eliminate the need for five to eight CPUs, which saves not only cost but also power.

Using ARM-based processors is another way to cut down on both costs and power requirements, compared with x86 offerings from Intel and AMD.

Intel's server and supercomputer chips are among Intel's most prized offerings. If it's not sweating yet, it should be. Just incorporating GPUs in supercomputers already represents a threat by eliminating the need for extra CPUs, and using ARM-based CPUs takes the hazard to a new level.

Last quarter, Intel's Data Center Group, which includes servers and such, had an operating margin of 48.6%, higher than the PC Client Group's 42.6%, which covers consumer notebooks and desktops. The PC Client Group still comprises the bulk of revenue, roughly two-thirds, but overall margins would take a hit if it starts losing traction in servers and supercomputers.

ARM fever continues to spread, and it sure helps that the chip designer has chip champions like NVIDIA, Qualcomm (NAS: QCOM) , and Texas Instruments (NYS: TXN) all backing it. This is one fever that can't be cured with more cowbell.

Add these chip players to your Watchlist to see whether Intel finds a cure.

At the time this article was published Fool contributorEvan Niuowns shares of ARM Holdings, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Qualcomm, Texas Instruments, and Intel and has bought calls on Intel.Motley Fool newsletter serviceshave recommended buying shares of Intel and NVIDIA, writing puts in NVIDIA, and creating a bull call spread position in Intel. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners