Is Intel's Sandy Bridge a graphics game changer?
Paul Otellini, Intel’s CEO, holding a wafer of Intel’s latest chips

As we get closer to next week’s Intel Developer Conference, you are probably hearing more and more about Intel’s Sandy Bridge. Sandy Bridge is the codename for the new generation of Core i7/i5/i3 processors (CPUs) from Intel. After introducing and propagating the Core ix architecture last year, Intel is on the verge of making it smaller, faster, cheaper – the end game for any semiconductor company. The new chip will be discussed at next week’s IDF, but should hit the market sometime in Q1 2011, which is a normal PC “refresh” period of the year.

Sandy Bridge has the particularity of embedding a graphics processor (GPU), and although this won’t be a high-end GPU, its performance is set to eclipse anything that Intel has done before. It could even threaten the low-end offerings from AMD and NVIDIA. Sandy Bridge also has video encoding/decoding hardware, which seems like an attempt to stem off the advances of GPUs in that domain.

But the stories of “imminent death” for the competition are *largely exaggerated* (admittedly, scaring the pants of investors does generate more page views) – here’s another such story.

Intel’s main goal with integrated graphics is not to “kill discrete GPUs”, but to offer a minimum level of graphics support, so that there’s a compelling reason to buy a good CPU, while lowering the overall cost of the computer, if possible. Integrating the graphics processor into the main processor die does helps in a few ways: 1/CPUs are manufactured with the leading edge processes, so CPU-integrated graphics will be even smaller (therefore cheaper) than their discrete or chipset-integrated equivalent. 2/ Less surface area will be required on the motherboard 3/There’s also an opportunity to reduce power consumption.

Sandy Bridge is making some noise in the gaming world, simply because now, Intel’s integrated graphics will (really) work… seriously! In the past, many games would not even start on an Intel graphics chip. Now, Modern Warfare 2 and Bioshock 2 can run decently (with the minimum graphics settings), and Sandy Bridge’s graphics even beat AMD’s low-end offering in sheer performance. The caveat is that Sandy Bridge isn’t compliant with DirectX 11, the latest graphics API from Microsoft.

For Intel, it’s a huge leap, but how much of a threat is it for AMD and NVIDIA? Probably not much. Intel already has a huge market share in the entry-level GPU space, and I suspect that the company might be more interested by increasing its own margins and up-selling CPUs than by starting another price war with AMD. NVIDIA used to have a low-end offering in their chipset, but never had a Core i7/i5/i3 chipset business, so there’s not much to lose. Most of the damage has already been done byNVIDIA’s legal woes with Intel over the Front-Side-Bus license (NVIDIA’s billion-dollars chipset business has almost melted away). NVIDIA would now rather spend their time working on something more juicy, like mobile, workstation or gaming products. AMD still lives in the same world that it’s been for years: under siege, but still kicking.

To be realistic, life for AMD and NVIDIA will indeed get a little harder, it’s not fun, but this is the “new normal”. Ironically,laptop makers had been using more discrete GPUs than ever (according to recent numbers gathered by Dean McCarron), and it will be interesting to see if that changes when Sandy Bridge arrives.

Entry-level and mid-range laptops is where the real action will be: Sandy Bridge should help building cooler (colder) and faster computers that are minimally gaming-capable, without requiring a discrete GPU (if you can put up with the minimal graphics quality in games).

In short, in addition to making its main processor faster and cheaper (in relation to performance), Intel is going to raise the bar in entry-level graphics to a level that was “unthinkable” by many just a couple of years ago: being able to run modern games on its integrated graphics chips. It’s a very important evolution for Intel (and for customers), but it won’t be industry-changing as most of the competition has already fled that segment due to pricing pressure.

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