SCOTTSDALE, Ariz., July 6, 2004 -
Although 2003 finally brought back double-digit growth to the once-flailing semiconductor industry, chip giant Intel faced many challenges on the manufacturing and competitive fronts. Intel began production on 300mm wafers using a mature 130nm process technology, but difficulties in a new 90nm process technology caused delays in the introduction of the Prescott and Dothan processors by close to 6 months. The problems faced with 90nm led to a complete overhaul in Intel’s product roadmap for 2004 and beyond.
Intel also faced increasing competition from AMD in processors for servers and desktops. With the introduction of the 64-bit-capable Opteron server processor and the Athlon64 desktop processor, AMD now stands toe-to-toe with Intel on mainstream PC performance and against Intel's Xeon server processor in performance and scalability. The Opteron challenge to Xeon gained momentum in 2003 with design wins at HP, IBM, and Sun Microsystems. However, Intel made slow but steady progress in 2003 in unit volume shipments of Itanium. Intel's Madison and Deerfield processors improved the prospects of the IA-64 architecture targeted at replacing RISC processor in high-end servers.
In-Stat/MDR also reports the following in its annual Intel wrap-up:
Overall Intel ASPs recovered throughout 2003 (if X-Box processors are excluded), and returned to the $200+ levels in 2H03, based on increased shipments of 64-bit Itanium and Xeon processors, and increased mobile processor shipments. Intel's ASP is still down about 10% from historic levels.
Intel slowed capital spending in 2002 after making tremendous investments in fab capacity in 2000 and 2001 and kept at about the same level in 2003. Intel also revised its manufacturing strategy to include retrofitting older fabs with new manufacturing technology.
Transmeta continued to show signs of improvement but the company continues to lose money. VIA settled its lawsuits with Intel in early 2003, mainly to VIA's advantage, and is finding a niche for its Centaur C3 processor in ultra-small PCs, developing countries, and embedded systems.
Recent In-Stat research, Annual Wrap Up: Intel Microprocessors Service (#IN0401105IN), which wraps up In-Stat/MDR’s coverage of Intel's processors for 2003 and provides a summary and updated information on events in 2003 for the previous sections of the report. The report summarizes the effect of a recovering economy on Intel’s products and manufacturing capacities. Looking back at 2003 also provides indicators of Intel’s strategies for 2004 and beyond. This report includes an appendix, Backup Data, with the latest data from the MDR model of Intel’s computer processor (CPU) shipments. Although we no longer include revenue forecasts for Intel's microprocessor business, we continue to project ASPs and processor volumes. Updated estimates through 4Q05 are provided for CPU shipments, sorted by processor die and market segments. Estimates for processor ASPs and manufacturing costs are provided through 4Q04, sorted by processor microarchitecture generation and market segment. Data, dating back as far as 1995, is supplied to provide a historical context to Intel’s present and future plans. Data is provided on historical pricing on obsolete Intel processors.
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