Will Intel's New Silvermont Atom Chip be Enough to Counter Rivals?

Intel (News - Alert) announced on Monday the latest version of its Atom chip. Code-named 'Silvermont,' the new 22-nanometer chip will have three times the speed and a five-fold decrease in power consumption from its predecessor. The release of the new chip has generated buzz among market observers about whether or not it will be enough for Intel to take significant market share away from its rivals.

The chip will be used in mobile devices, automobile entertainment systems, microservers and upcoming tablets using Bay Trail architecture.

After being the dominant chip provider in PCs for so many years, Intel has not even come close to matching that domination in the mobile device market. It could be argued that ARM Holdings, which designs chips and licenses them to companies like Qualcomm (News - Alert) and Taiwan Semiconducor (TSMC), is the 'Intel of the mobile device market.' Intel has yet to develop chips that support LTE, while Qualcomm already provides the technology in iOS and Android (News - Alert) phones.

The introduction of Silvermont may deliver the performance that Intel needs to give ARM a serious challenge. Silvermont's 22nm process can operate 18 percent faster at one volt than its 32nm predecessor. Conversely, the 22nm process could run at the same speed as the 32nm version using 20 percent less power.

Not content to rest on 22nm technology, 14nm chips are expected from Intel in 2015.

What effect Intel’s advanced designs have on increasing market share in the mobile device market will be dictated by its ability to deliver and convince OEMs to get out of their comfort zone with ARM (News - Alert). TSMC is developing a 20nm chip based on an ARM design, expected to come out in late 2014.

Assuming that TSMC delivers 20nm chips by late 2014, OEMs have a difficult decision: use TSMC’s 20nm chips now or gamble on Intel’s 14nm design. One thing is certain: any delay on Intel’s part to deploy 14nm chips would all but doom its attempts to get any significant share of the mobile market.