Microchip market continues evolving

In the heyday of the personal computer, it was easy to find just the right machine. Pick a PC with the fastest microprocessor chip that had the most transistors, and you were sure to have a powerful computer. Over the past few years, though, advancements in microprocessor chips are being measured in a completely different way. No longer is it important for the chips to run at ever increasing speeds or with constantly shrinking transistors. Instead, the chips are adding more features that make them better at networking and moving data.

This process began a few years ago, as the two primary chip makers, Intel and AMD, realized that the move to constantly shrink transistors and add more processing speed to the chips was going to generate too much heat for the chips to dissipate properly. Excessive heat is dangerous to the structural integrity of the chips, and the cooling systems required to cool the smaller and faster chips would become too expensive to justify the additional power that the smaller chips would provide.

In addition, the smaller and faster chips used more electricity to operate, which didn’t mesh well with the increase in mobile computing and personal electronics devices that were really beginning to grab a segment of the market a few years ago, such as with netbooks and tablets. The chip makers found that older and slower chips would provide the power needed to run these smaller devices, while also providing the long battery life that users desired.

Finally, chip makers found that they could improve the performance of the chips without increasing speed by adding cores. The cores in each chip allowed for multiple processing threads, which improved performance. Furthermore, to save power, some of the cores that weren’t in use could be shut down.

So, by adding more features to the chips, the Intels and AMDs of the chip making world realized they could keep making advancements to the chips without the need to generate even more heat.

Lately, the chip makers have been focusing on adding networking features. For instance, Intel last week announced its latest microprocessor chip aimed at servers, the eight-core E5-2600, which will provide better power efficiency while improving the chip’s responsiveness, leading primarily to better performance in data movement and networking.

With more and more computing work being done on the Internet through virtual machines, data center servers are consuming a greater chunk of electrical power than ever before. Intel’s estimates place current data center construction costs at about $450 billion per year. With so many centers being built, it’s easy to understand why data center companies would be looking for chips that can save power. Therefore, it’s no surprise to see major chip makers focusing their attention on this segment of the computing market, hoping to make data centers more cost effective to run, while adding functionality and performance.

Intel continues to dominate the microprocessor chip market, as a study from iSuppli showed Intel’s market share in the microprocessor market to be around 82% late in 2011. AMD’s share was just over 10%, with smaller companies occupying the other 8% of the market. Second-place AMD isn’t sitting idly by while Intel makes improvements in chips aimed at the server market. AMD recently purchased SeaMicro, which specializes in creating micro-servers that combine less powerful chips to save energy, while providing the desired level of computing power. NVIDIA, a historically powerful player in the graphics chip market, also is looking at the micro-server market, hoping to add low-powered microprocessors to its lineup.

Because the market for PC gamers and high-end video processing isn’t very large, you’re going to continue to see power-saving microprocessors aimed more at servers and at mobile devices, which means the days of Intel and AMD racing each other in very public battles to be the first to meet milestone speeds, such as 1GHz or 2GHz or 4GHz, are over. The races will continue, just more quietly.

With this change in full swing in the microprocessor market, now is the perfect time for chip makers other than Intel and AMD to try to gain a foothold in the market, such as NVIDIA is doing. Adjusting the way you think about computing and microprocessors will take some time, but the bottom line is these chips are simply evolving to meet the changing demands of the market. Besides, most current microprocessors are far more powerful than most people will ever need, other than PC gamers and videographers. So, unless you plan to perform one of these tasks with your computer, the process of evaluating microprocessors isn’t all that tough after all. Nearly all chips will do the job of general computing for you, regardless of which new PC you pick.