Intel will focus on next-generation laptop technology that combines graphics functions with the main processor, in the wake of the cancellation of its initial "Larrabee" graphics processor.
Despite the market-rattling news from Intel late on Friday--which pushed rival Nvidia's stock up more than 12 percent on Monday--Intel still remains the leader in the high-volume "integrated" graphics market.
And the world's largest chipmaker is about to up the ante in this market for low-cost graphics technology, which many consumers opt for instead of high-performance chips from Nvidia or Advanced Micro Devices's ATI unit.
Later this month, Intel will unveil the first product, codenamed "Pine Trail", that puts the graphics function directly onto the same piece of silicon as the main "CPU" processor, a major departure from current technology which puts the graphics in a separate piece of ancillary silicon called the chipset.
This will be followed quickly by a CPU-graphics combination chip for laptops dubbed "Arrandale."
Integrating the graphics function onto the CPU is a feat that AMD--despite its purchase of graphics chip giant ATI in 2006--has yet to achieve.
"This is the next logical step in further integration brought to us by Moore's Law," said Jon Peddie, president of Jon Peddie Research, which tracks the graphics chip market.
"This is where the volume of sales are," said Peddie, referring to the segment of the market that the processor targets. Arrandale is expected to be rolled out at the Consumer Electronics Show in January.
As a new feature, the chip will be able to accelerate so-called "drag-and-drop transcoding" in Windows 7. Transcoding converts, for instance, a movie on a PC to a format that makes it viewable on an iPhone or iPod. This won't be available immediately, however, Intel said Monday. It will come soon after the introduction of the processor as a "driver update."
The Arrandale chip will not support Microsoft's DirectX-11 mutlimedia acceleration technology for Windows 7. At least not right away. "It's on the roadmap," according to Intel. But this technology is not widely supported across product lines by any graphics chip supplier currently.
Intel also said Monday that it will continue development work on future standalone graphics products. "We haven't stopped investing in many-core graphics architectures," an Intel spokesperson said.