Intel vs. ARM： Who will be the winner in the battle of chips？

[Global Network Technology Comprehensive Report] When we are very excited about the newly released high-tech products, when we hold smart phones or tablets, when our lives are increasingly inseparable from the Internet, the question of what technology is will make most people confused. Chip, processor, server and cloud computing, few people know what they mean, but they are really hot words in the field of science and technology. On March 27th, Carlos Roa, a blogger of The Motley Fool website, published a blog post, explaining to us the current hot chip industry battle. The following is an abstract of the article. The views in this article come from the original author and do not represent the views of the World Wide Web.

Huanqiu technology peitu

Two empires

At present, the two giants in the chip industry are Intel and ARM.

Intel dominates almost all PC chip products in the PC market, including PCs, Apple’s Mac computers and servers. Intel has always been committed to reducing chip power consumption.

ARM’s products mainly cover mobile devices-smart phones, tablets and so on. Unlike Intel, ARM does not produce its own chips, but delegates the production work to companies such as Apple, Samsung, Qualcomm and NVIDIA.

As a result, the chip industry is divided into two platforms: PC devices and mobile devices, with Intel and ARM leading one field respectively. The two companies have indeed done well in their own fields, maintaining profit and efficiency growth.

However, the two companies are also eyeing each other’s markets-Intel wants to develop chips for smartphones and tablets, while ARM wants to expand its business into the PC field. A big war is imminent, and the final winner will earn a lot of money.

Industry upstart

As the chip market war approaches, both chip manufacturers have to change their CEOs. Paul Otellini, the current CEO of Intel, will abdicate in May, and his successor has not been decided. ARM, on the other hand, announced that Warren East, the current CEO, will transfer his rights to Simon Segars, the current chairman of the company, in June.

For the time being, ARM still gives people a better impression than Intel. After all, ARM has made clear the successor of rights, and Intel has spent several months looking for a new boss. In addition, the ARM left by Warren East, the current CEO of ARM, is far more powerful than when he took over.

As can be seen from ARM’s annual report, during East’s tenure, ARM’s revenue increased by 700 million US dollars, its sales volume increased by 300%, and its market value increased by an astonishing 2000%. In addition to the share price increase brought by these growth, ARM also cooperated with Microsoft to provide support for Windows RT. There are indications that the upstart in this industry is gradually replacing Intel. As for success, it’s hard to say.

Industry giant

Turning to look at Intel, many people think that Intel’s recent share price of $21.76 is undervalued. Intel has a solid foundation, high brand awareness, a single-digit historical price-earnings ratio and a dividend yield of 4.2%. Trefis, an American financial consulting company, valued Intel’s share price at $29.19.

So why is Intel’s share price lower? The main reason should be that consumers are keen on mobile devices at present, but the demand for PC is decreasing, and PC is Intel’s main market. Popular smartphones and tablets mainly use low-power chips designed by ARM. Like Dell and Hewlett-Packard, Intel also missed the mobile device revolution, which caused its share price to fall by 23.48% last year.

However, it is not too late to take a step back and make up for it. Intel still has a chance to enter the mobile chip market. What the company needs is not to catch up, but to expand the market and expand its business to the field of mobile devices. As a giant in high-tech engineering design and high-quality chip manufacturing, this should not be difficult because Intel has invested a lot of money in research and development.

In addition, Intel has joined forces with Google and successfully put its technology into the Android mobile phone system. Google also said that the Android system released in the future will be able to play the best performance under Intel’s 32-bit construction. Although the choice of which chip to use is up to the mobile phone manufacturer, it is still good news for Intel. Not only that, Intel has also established cooperative relations with ZTE, Huawei, Motorola and Lenovo. If all these companies use Intel chips, it proves that Intel is really bent on entering the mobile market.

Battle of the chip

If the battle for chips really starts, who will be the winner? The result is not difficult to guess, of course, Intel.

Compared with ARM, Intel has absolute advantages in influence, strength and financial resources. And Intel’s dominant position in the inherent PC field, ARM is also difficult to shake. Intel’s future products will also surpass ARM and consolidate its strong position.

These assumptions are based on the premise that the manufacturers of ARM chips will not shift their camps. Imagine if Apple decides to switch to Intel chips, what impact will this have on ARM?

At present, the ARM chips used by Apple’s iPhone and iPad are all made by Samsung, and Samsung is undoubtedly Apple’s most direct competitor at present. It is obviously unwise to let your sworn enemy produce chips that you urgently need. Switching to Intel means that Apple no longer needs to rely on Samsung.

From Apple’s point of view, cooperation with Intel can diversify the supply chain and cause competition in the supply chain, thus consolidating its territory. Not only that, Apple will gain greater control over the supply chain and reduce the risk of insufficient supply when the demand for iPhone and iPad is at its peak.

For Apple, switching to Intel chips is absolutely profitable. If Intel can improve the design of mobile chips, improve work efficiency and reduce power consumption, it is only a matter of time before Apple switches to Intel. At that time, the situation will be very unfavorable for ARM, because ARM will lose a lot of income from the conversion of intellectual property rights for designing chips for Apple.

The author thinks that despite the good performance of ARM at present, the remarkable growth of Intel will definitely cause the loss of ARM. If you want to make a profit in this chip war, support ARM in the short term and Intel in the long term. (Internship Compilation: Cai Shuo Reviewer: Chen Wei)