Will Intel's New Chip Impress Investors?


As PC sales continue to decline, Intel's (NAS: INTC) shift to new markets, including the cloud and mobile computing, isn't just a good idea -- it's a must. It's also making strides in its efforts to make news in the tablet, server, and enterprise markets.

A sticking point, not only for Intel but for the cloud, enterprise, and mobile industries in general, is developing a chip that has the power to run infrastructures as large as Facebook's (NAS: FB) , for example, without using obscene amounts of energy. To that end, Intel would like to introduce you to its Atom processor S1200 family of processors.

Kudos, from all the right people
If yesterday's announcement is any indication, Intel's new set of chips has the backing of some of the leading IT players in the industry. Though Frank Frankovsky, VP of hardware design for Facebook, wasn't committing to any Intel chip purchases yesterday, he did make it clear that with 4 .5 billion updates daily, Facebook needs a reliable, efficient, and cost-effective processor. However, the fact that Frankovsky joined Intel VP of Datacenter and Connected Systems Diane Bryant on the San Francisco stage for the announcement speaks volumes.

Along with Facebook, executives from Hewlett-Packard and Microsoft were also on hand to lend support to Intel's new server and cloud computing solution. Also on board with Intel's latest efforts is James Hamilton, chief technology officer of cloud innovator Amazon.com's (NAS: AMZN) Web Services. In yesterday's blog, Hamilton gives glowing praise for Intel's S1200 line of processors , saying, "I'm excited by the S1200 announcement because it's both a good price/performer and power/performer and shows that Intel is serious about the microserver market."

So what?
Hamilton's remark that the S1200 chips "show that Intel is serious..." says it all. Thing is, that's exactly what Intel has been trying to make clear to investors for months now, along with getting serious about dominating the mobile computing chip market. As I alluded to a week back, Intel's shift from supplying chips to PC manufacturers to emphasizing growth in explosive new markets isn't new.

Intel's market expansion objectives will mean running headlong into ARM Holdings (NAS: ARMH) , and its own set of newly released data center chips . No easy task, as ARM already holds a strong position in both microprocessors and mobile computing.

But recent discussions involving Intel taking over Samsung's role in the manufacture of ARM chips for Apple's (NAS: AAPL) iPhones, along with news that Intel may buy into Sharp's mobile display technologies, are two more ways Intel can quickly make a dent in ARM's market share.

For value investors, the S1200 chips may not be the one single announcement that wakes the market up to the outstanding growth and income opportunity that Intel presents, but that's all right. It gives you a bit more time to take advantage of its industry-leading 4.35% dividend yield, lowest trailing earnings ratio around, and best returns on assets, equity, and investment the IT sector has to offer.

The article Will Intel's New Chip Impress Investors? originally appeared on Fool.com.

Tim Brugger has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Amazon.com, Facebook, and Intel and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Apple, Amazon.com, Facebook, and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.