Wolfe's Den: Intel Inches Into Its Next Big Market

Diversifying beyond the PC, Intel's multi-billion dollar embedded computing push envisions Atom processors in millions of appliances, Smart TVs, and other connected devices.

Alexander Wolfe, Contributor

January 27, 2011

3 Min Read

Inside Atom SoC

Earlier, I spoke about SoC. That's a fancy term in the semiconductor world, used to refer to silicon that's customizable in a cost-effective manner. Specifically, a bunch of off-the-shelf blocks of intellectual property (IP) are available and can be plopped onto a silicon die, according to an individual customer's demands. IP blocks refer to functional sections like a CPU, input/output handler, digital signal processor, network interface, etc.

It appears to me that Intel has slightly misappropriated the SoC term in applying it to what they're calling the "Intel SoC processor for cars, Internet phones and smart grid devices" [pdf press release].

These SoC Atoms are really regular, off-the-shelf CPUs. If they were true SoCs, they'd be different for each customer. However, they'd also be prohibitively expensive for most buyers. What Intel has done is to select the most popular functional blocks to create a "custom" part usable by nearly everyone. This is analogous to what Detroit used to do when they stuck a "custom" badge on a mass-produced variant of a popular sedan. The biggie in the Atom is an interconnect intended for easy pairing with a variety of input/output devices, the better to be useful in embedded apps.

No matter. Intel has brilliantly broadened its Atom brand beyond the netbook. That's something I never thought Intel would be able to pull off.

When Atom first appeared in 2008, I wondered how Intel was making any money on such a low-priced processor. The cheapest Atom netbook chip sells for around $29. The newer Atom SoC parts range from $19 up to $85, though volume prices paid by vendors buying in bulk are less.

In early 2009, Intel VP Stephen Smith told me that the company was achieving very high yields and that's how it was able to make a profit.

"We get something like 2,500 die locations on the wafer. We already have very good yields, very low defect densities," he said at the time. "We're not concerned about the cost of the Atom processor."

Looking Ahead

That's good news for Steenman, who in December was named general manager of Intel's embedded and communications group. He's got two potent levers to drive the embedded business forward: Atom's apparent profitably, and the huge expected uptick in volume, sparked by Atom's appearance in every greater numbers of connected consumer appliances.

"You'll have 15 to 20 connected devices in your home, easily," Steenman said. Intel's embedded business already does well over $1 billion in annual revenues. All of which means that Intel CEO Otellini's dream of diversification appears well on its way to becoming a reality.