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Intel's laying off 12,000 people: Five hurdles Intel faces in the near future

Tamlin Magee | April 22, 2016
It's not plain sailing for Intel as it plans to realign its focus away from the PC market and towards data center and Internet of Things divisions.

However, Google did announce it was considering using IBM Power chips at an Open Compute Project event a few weeks ago. It all adds up to suggestions one of the most influential hyperscale businesses is looking at options other than Intel, and from its perspective, if Google and others can grab price reductions through greater competition with Intel, at the scale they're running at the situation would be a winner.

Such events could be a clear marker for others to follow suit. Heavy hitters like Facebook and Microsoft, along with some of the biggest banks, are all active members of the Open Compute Project. And moving away from Intel would be likely to filter down to other businesses over time.

For its part, Intel has been trying to woo hyperscale providers, but there is a risk it could lose influence nonetheless.

Artificial intelligence, too, is set to become more of a part of our everyday lives, and it's going to be quite reliant on the cloud due to its processing demands. This is another big area for Google.

Arguably, Intel's chips are not seen quite as suited to running AI tasks compared to, for example, Nvidia. As cloud usage here grows - whether that's AI or IoT driving it - there are uncertainties about Intel's place at the table.

Moore's Law

There's an argument doing the rounds that Intel cofounder Gordon Moore's rule that chip transistors will double roughly every two years is losing its relevance in the semiconductor industry.

And, although the law has proved somewhat flexible in its definition, it's slowing enough to spark some concern about the role Intel will be able to play in the future. Transistors remain important but they're no longer the be all and end all in silicon, production is becoming ever more expensive, and that's in materials and in the fabrication itself.

There are a number of potential replacements for silicon chips - from graphene to quantum computing - but doubts remain over the commercial viability of all of them. Nevertheless, uncertainty around the chip market is unlikely to be good for its most dominant player.

And Intel's roadmaps are already becoming longer and less predictable too - having recently moved cycles from tick-tock to tick-tock-tock.

Monopoly

Intel's friends are arguably alliances of convenience. The company all but booted out its rivals in its traditional core areas, generally leading to the choice of Intel or, er, Intel.

It wouldn't be entirely surprising if some of these long-term alliances started to look elsewhere if presented with a decent economic case for doing so. Just as vendor lock-in is an issue for the cloud, the same can be true for hardware.

 

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