Battlechips: Economist

Jun 5th 2008 | SANTA CLARA

From The Economist print edition

As once-distinct markets start to overlap, chipmakers come to blows

FOR YEARS the chip industry had only one story: AMD's David pitted against Intel's Goliath, as the two Silicon Valley firms fought it out in the market for microprocessors that power PCs and servers. But a flurry of announcements this week shows that things are no longer so simple, and chipmakers that once ruled separate markets have started to come into conflict.

Intel has long dominated the market for PC and server chips, but there are two other big classes of processors: those for high-end graphics and for mobile phones. Most graphics chips are made by ATI Technologies (now part of AMD) and Nvidia; most mobile handsets are powered by processors based on technology from ARM Holdings, a British chip-design company.

These markets have been largely separate because different processors need to be good at different things: PC chips must be able to run ever more complex software; graphics chips have to be good at rapidly crunching data in parallel streams; and handset chips must balance performance with power consumption. But the borders between these markets are blurring as the PC matures and portable devices become more elaborate and capable.

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