After three years of promises, Intel Corp. (Nasdaq: INTC) today (Thursday) is scheduled to formally unveil "Light Peak," a data transfer technology for computers that is 25 times faster than USB 2.0.
It may be no accident that Apple Inc. (Nasdaq: AAPL) is also expected to upgrade its MacBook Pro line of laptops today, with a Light Peak port – re-branded as "Thunderbolt" – said to be a key new feature.
The Light Peak introduction follows another major Intel announcement. Last week the company unveiled plans to build a $5 billion chip manufacturing facility in Chandler, Ariz. Intel said the factory, slated for completion in 2013, will allow it to build faster, more efficient chips.
Light Peak, which Intel would like to establish as new connectivity standard, transmits data at 10 gigabits per second. Intel says it could be ramped up to far higher speeds – up to 100 gigabits per second. That would be 250 times faster than USB 2.0 common on today's PCs.
And Light Peak's fiber-optic technology makes it possible to combine previous standards such as USB and FireWire into one cable as well as enable cables of much longer length. (Intel said last month that the initial version of Light Peak will use copper, but later versions will employ fiber optics.)
If Apple does adopt Light Peak/Thunderbolt throughout its Macintosh line of desktop and laptop PCs, it would give a powerful boost to its chances of becoming a new standard. And there is precedent. Back in 1998, Apple helped push the original USB as a standard by making it the only connection port in the very first iMac.
Of course, it's USB that stands in the way of Light Peak gaining traction. Ports for the USB 2.0 version, introduced in 2001, are found on virtually every PC. They connect mice, keyboards, printers, flash drives, digital cameras and MP3 players. USB 3.0, introduced in 2010, is expected to see more widespread adoption this year and is backward compatible with the previous two iterations. So getting consumers to switch will be a challenge.
Intel may have chosen Apple as the vendor to launch its Light Peak campaign because, at least initially, its advantages are likely to appeal only to buyers of pricier high-end PCs. Apple holds 70% of the high-end PC market.
And Light Peak's cutting-edge features surely appeal to Apple. In particular, Light Peak's ability to consolidate virtually all connections into one sleek cable conforms to Apple's mantra of elegance and simplicity.
With growth in its traditional CPU business slowing along with the PC market, Intel may see Light Peak as fresh revenue stream. In addition to selling the parts, Intel could collect an exclusive licensing fee from vendors adopting the standard.
Smaller is Better
Intel definitely could use some sort of spark. Although it reported a record 2010 in terms of earnings and revenue, it derives about 75% of that revenue from its PC-related businesses. With the global PC business mature, most of the growth now is coming from the mobile segment – smartphones and tablets. Unfortunately, Intel's mobile chip, Atom, has a market share of just 14.5%, and makes up only 4% of Intel's business.
Intel no doubt is hoping its just-announced Arizona manufacturing plant will make the company more competitive in the mobile chip space.
"I think it's going to be destined for high-end servers and mobile devices, and devices we haven't even comprehended of at this time," Josh Walden, vice president of Intel's Technology and Manufacturing Group, told the Phoenix Business Journal.
During Friday's announcement, Intel President and CEO Paul Otellini said the new facility, dubbed "Fab 42," would be the world's most advanced, high-volume semiconductor plant.
That's a big claim, but it is backed up by the 14-nanometer process the facility will implement. By comparison, Intel's current CPUs, the Core i7 series, are made with a 32-nanometer process.
Shrinking the circuits on the chip has gotten increasingly difficult, but the rewards are worth it.
Chips produced with a smaller nanometer process use less energy, are more powerful and become cheaper to make. Mobile devices in particular benefit from more-capable chips that use less energy (less of a drain on the battery, which means more hours of use).
This new chip-making process — resulting in a faster, cheaper, more efficient product — should give Intel a fighting chance to grab a bigger chunk of the mobile market.
Intel already is hard at work expanding its presence in mobile.
"In 2011, you will also see Atom in a wide array of tablets, running three different operating systems – Windows, Android, and MeeGo," Otellini said during Intel's fourth quarter earnings conference call last month. "You will also see Atom processors appear in smartphones, operating at very competitive power levels with performance that will lead the industry."
News and Related Links:
Intel's $5B Chip Facility to Bring Jobs, Drive Absorption
Light Peak: black hole or brilliant beacon?
- Investing Daily:
Intel's "Great" Earnings Are the Beginning of the End
Intel says Light Peak interconnect technology is ready
Light Peak – Interesting Facts
- Phoenix Business Journal:
Intel's new Arizona plant would set standard for chips
Intel's fourth quarter takeaways: Data centers, tablets and netbooks
- Money Morning:
New Mobile Computing Era Bringing Big Gains to Chip Makers Intel Corp. (Nasdaq: INTC), NVIDIA Corp.(Nasdaq: NVDA)
- Money Morning:
Intel Corp. (Nasdaq: INTC) and AMD (Nasdaq: AMD) Betting Big on Combination Chips
- Money Morning:
Tech Stocks Set To Soar in 2011 as a New Era of Personal Computing Dawns
About the Author
Dave has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.