(Intel is a sponsor of SVW)

Intel announced plans for a new business group manufacturing system-on-a-chip (SOC) semiconductors. SOCs are souped-up microprocessors that are tuned for specific types of devices, such as mobile internet devices, smart phones, or medical devices.

Intel's SOC chips combine a microprocessor with memory, graphics, and embedded software plus specialized chip and software functions.

SOCs can shrink almost an entire board of chips into just one or two chips. This makes digital products more reliable and less expensive to make.

Intel predicts that within a few years there will likely be billions of digital devices connected to the Internet. Most of these billions of devices won't be PCs but will include virtually any industrial, office, or home electronics device that can benefit from some processing and Internet connection--which is most electronic products. Intel wants its PC architecture to move into many different devices helped by the massive number of Intel architecture software developers.

To target non-PC products Intel is making SOCs that are specially designed for a specific product category.

Intel has several advantages against SOC rivals:

- It owns advanced fabs in which its design software is already tightly integrated into the complex process technologies used to make chips. It takes several hundred processes to make a chip and each machine has to be finely tuned to the design--minute differences can lead to low yields and other problems.

- Most SOC rivals rely on third party chip foundries to make their chips and sometimes it can take several months to fine tune a production run.

- Intel's microprocessor design is difficult to clone.

- Intel has unique chip functions that it can easily combine on its process technology.

Wednesday it announced 8 SOC chips and said it would have 15 SOCs in 2009.

Foremski's Take:

I asked Intel if it would make an SOC only for one customer. I was told that the goal is to create a broad family that would be available to any buyer.

However, Intel already makes specialist products for just one customer. It makes the motherboard for Apple's MacBook Air. It was given just a year to design the board, which gives the MacBook Air its super slim shape and lightness. It was a challenging project but Intel managed to do it--and it did it for just one customer. Why not do the same with SOCs?

One way for Apple to reduce its future costs of manufacture is to shrink as much of a notebook computer's motherboard onto SOC chips, making it a natural customer for Intel's SOC group.

If that were to happen, would Apple seek to enhance the uniqueness of its notebooks and hardwire special functions into the chip that would provide its products with special qualities--but also guard against clones?

Could others follow? Would it make sense for Dell notebooks to have different sets of chip based features from Lenovo or other notebooks?

Closer to customers . . . SOCs can also tie customers more closely to Intel because switching to rival Advanced Micro Devices' microprocessors would be more difficult due to the specialist nature of the chips.

Fragmenting the PC platform? There will be at least 15 different SOC platforms next year with different sets of capabilities--that means software won't be easily portable between the many Intel PC architecture platforms.

The SOCs will represent fragments of a 26 year old PC platform standard. It'll be interesting to see how those fragments will grow into billions of connected devices. Intel's latest business launch seeks to make a big impact on the future of tech.

WSJ: Intel Brings Out Multifunction Chips

News.com: Intel storage chips point to SoC future

- - -

Rave reviews find out why! - Order the The Amazon Kindle Electronic Book Reader!

You need video services! Creation, Distribution, Attention. Contact Aron Pruiett at SF Media Collective- 415 533 4487 - Here is a demo reel.

Silicon Valley Watcher Consulting services - call Tom at 415 336 7547