Being the world\'s largest semiconductor manufacturer, this week spent most of the time on Computex in Taiwan, telling the tech community about their new Haswell processors and future mobile processors.
When I was a kid, I liked to assemble the puzzle
so much that I would turn the puzzle over to the blank side and assemble it with only the puzzle outline as a guide.
Intel, Meiguang (NASDAQ:MU), Apple (NASDAQ:AAPL), and Samsung (OTC:SSNGY)
The story is a Level 1 puzzle.
Let\'s try to assemble the puzzle.
The number of puzzles will be noted in the article. Jigsaw puzzle: 1.
Massive excesses that cannot be explained
Capacity of Intel 2.
Apple needs to move all its semiconductor manufacturing business from Samsung.
Apple needs to cut the connection between Samsung and NAND memory.
There may be a Samsung IP problem in series chip 5.
Apple needs a secure source for nand6.
To maintain their technological edge, Apple needs to move the \"A\" chip business.
Apple uses Elpida as a source for mobile dram8.
The industry also needs billions of NAND chips of 128Gb for the SSD revolution.
The memory industry may not be able to keep up with future demand.
The memory wall is hit by a high-performance microprocessor \". 11.
Intel relies on memory manufacturers to provide enough products to support at least 0. 3 billion CPU processor chips and 4-
0. 5 billion mobile application processor. 12.
Almost every DRAM storage chip is connected to an X86 device or an ARM-based mobile application processor. 13.
Almost every NAND storage chip is connected to an X86 chip or an ARM-based mobile application processor.
Apple is very keen to not rely on Samsung on any key components (2, 3)
For all iProducts.
Since Samsung has some restrictions on Apple in NAND memory (5)
Apple is unable to transfer their \"A\" chip production from Samsung.
An important complication may be related to some of Samsung\'s basic intellectual property rights (4)
Samsung may not be willing to hand over \"A\" chips to another chip maker to interweave together.
The possibility that Apple has to give up is high --
Due to the Samsung/IP issues discussed in the above link, the internal application processor design.
Because, when Bay Trail goes public, it may be the best performance/power option for Apple\'s iPad products.
By the end of this year, Intel may show an advantage over the iphone\'s latest \"A\" chip, which has led Apple to choose to use Merrifield for the iphone (6)
And IP issues (5)with Samsung.
All of A sudden, the debate over Intel\'s manufacturing of ARM-based \"A\" chips is over.
Just like suddenly, a lot of excess capacity will be utilized by Intel (1).
The trend of thin, light, long battery life for PCs and tablets actually requires the use of SSDs in all laptops and tablets instead of hard drives.
Intel will launch at least 0. 3 billion pc cpu chips in a painful year.
Since the memory industry will be in a shortage of NAND components, which is critical to Intel\'s continued success, it is reasonable to expect Intel to hold things in its own hands (8, 9, 11).
This will involve assigning an Intel ground-
A huge new factory has been added to the production of NAND memory (1).
To ensure that the NAND memory business will never slide into the commodity business model, Intel for performance can include the SSD in the CPU package (12, 13).
Therefore, the SSD business related to Intel CPU will be monopolized by Intel.
These SSD must be small in order to accommodate the CPU package.
I mean, 8 128Gb NAND chips are stacked on the controller chip, with a total floor area of about 150 square feet.
Well, it\'s as big as the Haswell chip next to it.
For users who need more than 128GB of SSD, Intel can install two NAND stacks in the CPU package.
NAND SSDs manufactured by Intel will run out of excess capacity.
Since the SSD costs about $1 per GB, the drive is priced at $128, equivalent to the current average price of Intel CPU chips.
To complete these \"compute modules\", you can add DRAM from the 4gb stacked component to the CPU package (10)
Thus overcoming the Memory Wall (10).
With the computing module above, Intel\'s content per PC will increase from about $100 to about $300.
This will soon absorb the excess capacity of the partial multiples required by my previously estimated CPU business.
This capability is also available in the mobile space, and Intel dollar content in mobile devices will more than double.
The impact on PC manufacturers will be to allow resources to be used for product differentiate, rather than cutting deals on NAND and DRAM, which does nothing to enhance the computing experience.
Mainly because solid state drives need to match the energy saving Haswell chip almost very much, the new capacity needed for NAND memory is incredible, and the time available capacity is very short.
In fact, in order to solve this problem, it is necessary to have the ability now (1).
Suppose the average SSD size of 192GB is 3 and the volume of the NAND part is 3.
6 billion 128Gb chip.
Let\'s say Intel will build a chip on a 14nm process (OTCPK:LINK)
A 128Gb chip takes about 120 square feet.
Mm, about 400 good parts per piece, or about 9 million pieces.
$5 billion per month, 100,000 wafers start
Fab can produce 1.
2 million films per year.
My personal opinion is that by the end of this year, Intel will have at least two more than this size of the fab.
Even such capacity is less than 30% of the capacity required to fully convert to solid state drives in the pc.
It is reasonable to say that not all PCs will be converted to SSDs immediately, and the Intel/Micron memory joint venture IMFT may provide some additional NAND capacity.
Micron also has about 40,000 wafers to be produced at full capacity at its Singapore plant, and Micron suggests the possibility that at least one 100,000 wafers per month will start converting from DRAM to NAND.
Even so, NAND capacity is only half of what is ultimately required.
Conclusion: A ultrabook that is really light, thin, and low power does not use a hard disk, and there is no additional NAND capacity for traditional memory manufacturers.
Across the industry, only Intel has a lot of unused capacity.
Intel must enter the dedicated memory business from its own perspective. preservation.
Paul McWilliams, a very precise technical writer, believes that Intel\'s acquisition of Micron is an external possibility.
The eye guess will be a tighter coupling between MU and Intel, and the INTC actually has the potential to buy MU, so, re-
Enter the memory market.
\"When we flipped the completed puzzle over, we saw a picture of Intel not only taking the lead in the PC space, but also in the mobile business.
Pictures include Intel responsible for the memory requirements generated by their processors by manufacturing directly or purchasing Micron/Elpida directly.
We see that based on the existing $20 billion PC and server business, Intel has $30 billion worth of memory and $53 billion worth of mobile services.
Gross profit margin could fall to 100 billion on the size of $ 50% in revenue, but still generate a net profit margin of 25%, or $5 per share.
What is amazing is the speed at which this change must take place.
After three years of $35 in gold capital spending, Intel\'s capacity is in place.
Haswell and Silvermont are in place and Apple may not be able to continue on-
Thanks to a mix of Apple and Samsung Intellectual Property, house designed the processor.
Meiguang is waiting for the end of Elpida\'s acquisition and then making an informed Intel acquisition for $20 a share.
The semiconductor industry will change incredibly over the next 12 months.
Disclosure: I am long INTC, MU.
This article was written by myself and expressed my views.
I received no compensation (
In addition to Seeking Alpha).
I have no business relationship with any stock company mentioned in this article.
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