With Larrabee chip, Intel takes swing at AMD, Nvidia

The processor will power Intel's first stand-alone graphics card

Although Intel Corp. offered up few details about its upcoming Larrabee chip on Monday, analysts say the move puts rivals Advanced Micro Devices Inc. and Nvidia Corp. on notice that the competition is taking a new -- and maybe even more contentious -- turn.

While keeping the number of cores Larrabee will have under wraps, Intel did note that the first Larrabee chip will have numerous x86 processor cores and support for OpenGL and DirectX, allowing it to run existing games and software requiring high-end graphics. The company also noted that the chip will first go into graphics cards designed for high-end gamers and power users. After that, it could become an accelerator, giving CPUs a major performance boost.

Larrabee marks a major step in the graphics world for Intel because it will be the company's first stand-alone graphics card. Traditionally, Intel has relied on graphics technology from companies like Nvidia and ATI, which now is owned by AMD.

That means Intel will be facing off against AMD and Nvidia in a market where those companies were largely free from threats posed by their much bigger and well-funded rival.

The good news for AMD and Nvidia, though, is that Intel isn't planning to release Larrabee for another year to 18 months. That gives Intel's rivals time to put on their best running shoes and get ahead in the graphics race.

"Intel is really going after all segments of the market," said Jim McGregor, an analyst at In-Stat in Scottsdale, Ariz. "I don't think AMD has to be worried about this particular threat. I think it's part of a much larger threat from Intel.... Is there a threat? Yes. It's Larrabee. It's Nehalem. It's everything Intel is doing. They're really pushing hard."

Nehalem is a 45-nanometer chip, four-core processor slated to go into production in the fourth quarter of this year. The Nehalem chips are designed to include an integrated memory controller, eliminating the need for a front-side bus. The new Nehalem architecture is modular, which would make it easier to scale from two to eight cores.

McGregor said the upcoming chips give Intel a stronger stand in the market. "Do they have to be in the graphics market? No, but it helps," he said. "It rounds out their offering so they can say, 'Yeah, we've got everything.'"

Dan Olds, an analyst at Gabriel Consulting Group Inc., said Intel's graphics move could be more of a concern for AMD, which already is dealing with another set of issues. With a recent leadership change, financial challenges arising from its acquisition of ATI and a year of missed product deadlines and turmoil, AMD needs to get back onto steady ground. And AMD has been making strides, shipping a slew of new products and hitting deadlines this year.

But one more layer of competition with Intel is not what the company needs, Olds said.

At least Larrabee's release is still a ways away, according to Charles King, an analyst at Pund-IT Inc. in Hayward, Calif.

"This isn't great news for Nvidia and AMD, but they have time to move ahead," he added. "If these guys have till late in 2009 or even 2010, that's a long time in the IT industry.... If Intel was saying they'd be definitely driving these chips to market next year, that would be a real blow. If they get another six to eight months, that gives them more breathing room."

Copyright © 2008 IDG Communications, Inc.

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