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Intel Corporation Message Board

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  • ideal_invst ideal_invst Nov 30, 2012 9:35 AM Flag

    Why ARM servers don't seem to be threatening...

    The X-Gene CPU (if Applied Micro's numbers are to be believed) will be the most powerful of the ARM 64 bit designs (so far announced), much more powerful than ARM's own 64 bit cores. It'll be up against low end 'real' servers designs from Intel, not Atom derived micro servers.

    ===========

    So what prevents Intel from doing the same with low-power Xeons which they have already introduced...and will improve with even lower-power with next generations?

    Intel will have no choice but to plug all the low-end markets with perhaps lower margins than the high-end CPUs. But keep in mind, the ARM guys have to pay ARM, the processor designer, and the foundry - so they can't afford to give it away either.

    Most monopolies including Intel have a cash cow to rely on and build their adjacent spaces. I do see almost all of the ARM vendors, initially in the attempted server space and later in mobile, dropping off much like Texas Instruments did recently.

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    • So what prevents Intel from doing the same with low-power Xeons which they have already introduced...and will improve with even lower-power with next generations?

      Intel will have no choice but to plug all the low-end markets with perhaps lower margins than the high-end CPUs. But keep in mind, the ARM guys have to pay ARM, the processor designer, and the foundry - so they can't afford to give it away either.
      ----

      I am sure they will.

      In the case of X-gene - it's their own designed core. They'll still have to pay something to ARM but it'll be a tiny fraction of the SoC's selling price. Even in the case of an ARM designed core (such as with AMD) the total cost of the licence and royalty over the life of the product is still (typically) less than the cost of designing and building your own core. This is the beauty of the IP business model.

      Just like the phone market, it's not just about the CPU it's the SoC - Server-on-chip as these guys now say. Intel could have the best CPU in terms of price/performance/watt but if it's not contained in the correct SoC package (the fabric) then they will struggle.

      • 1 Reply to theblueredmonk
      • In the case of X-gene - it's their own designed core. They'll still have to pay something to ARM but it'll be a tiny fraction of the SoC's selling price. Even in the case of an ARM designed core (such as with AMD) the total cost of the licence and royalty over the life of the product is still (typically) less than the cost of designing and building your own core. This is the beauty of the IP business model.

        =====================

        From your first sentence above, it is evident Applied Micro has to spend on designing their own X-gene....even if it is their own designed core, it doesn't come free. They need to spend R&D/Engineering dollars to design them....so they have costs...just like Intel. In addition, they have to incur IP costs to ARM, and fabrication costs to the foundries....and their respective margins.

        Whereas, Intel can mop it up from all 3 areas....IP, design, as well as fabrication.

        I really think that it is a stretch for ARM vendors to stay competitive a year or so down the road.

    • And, for sure, it won't happen immediately. But over time, I am sure it will.

 
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