Did Intel Just Mislead Chip Investors?

Intel made quite the splash earlier this week when it announced 7-watt Ivy Bridge processors for laptops and tablets. Considering how the previous generation consumed 17 watts, this was received as quite an accomplishment in terms of energy efficiency. Sadly, it turns out that marketing hype takes most of the credit for this work.

Invent a new metric
When the numbers didn't give Intel its desired outcome, the company decided to invent a new metric, "Scenario Design Point," to measure power consumption. Traditionally, chips are compared against one another by what's known as thermal design power, or TDP. It measures the amount of cooling power required to dissipate heat created by the processor. Simply put, machines are built with a specific amount of cooling power to ensure a chip will not overheat. The amount of cooling power is directly related to a chip's TDP output.

Scenario design point, on the other hand, measures how the chip performs under "average" conditions. Out the box, these 7-watt rated SDP chips are actually rated at 13 watts under TDP terms, unless the manufacturer decides to permanently downgrade it to 7 watts. This would be appropriate for a tablet form factor where heat dissipation isn't a strong suit. Naturally, this power savings comes at the expense of raw processing power. At 7 watts, a 1.5 gigahertz chip will run at 800 megahertz by default, but still has the capacity to throttle higher when loads dictate and temperatures remain low.


Just being honest
Intel claims it's just being honest with its partners, giving them the flexibility to use the chips for different purposes. From a business standpoint, it allows OEMs to leverage a better economy of scale by being able to buy one chip that has many different uses over a longer period. From a manufacturing standpoint, it's more efficient for Intel to fabricate one chip. But as an investor, I'm a bit disappointed. I, too, was under the belief that these chips were significantly better than the previous generation. Previous 17-watt Ivy Bridge processors were already capable of being throttled down to 13 watts TDP -- exactly where this generation begins. In the end, The argument that Ultrabook OEMs would have to refresh their inventories because the generational energy improvement was so significant is no longer compelling.

When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, that market is maturing, and Intel finds itself in a precarious situation longer term if it doesn't find new avenues for growth. In this premium research report on Intel, our analyst runs through all of the key topics investors should understand about the chip giant. Better yet, you'll continue to receive updates for an entire year. Click here now to learn more.

The article Did Intel Just Mislead Chip Investors? originally appeared on Fool.com.

Fool contributor Steve Heller owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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