New battle lines have been drawn across the microchip manufacturing industry amid the global success of smartphones and tablet computers.
When the personal computer chip-making giants Intel and AMD signed their historic antitrust settlement, carving up much of the global microchip industry between them, they announced the dawn of "a new era" in microchip manufacture.
But the global microchip industry's "new era" has already taken a different turn from the future only recently envisaged by Intel and AMD.
Both companies are now rapidly losing market share to rivals, notably ARM, a company that designs microchips for smartphones and tablet computers. Other new smartphone chip rivals include Huawei and ZTE, both in China.
But while Intel is planning a full-scale assault on the smartphone market with a revolutionary new chip designed for mobile phones, AMD told The National that it has no plans as yet to enter the smartphone market.
According to the World Semiconductor Trade Statistics, a non-profit organisation of 64 microchip companies worldwide, the global microchip industry is continuing to grow and may hit US$314 billion (Dh1.15 trillion) in revenues this year. It made the prediction after revising its growth projections for this year, and now expects the industry will grow by 5.4 per cent this year rather than 4.5 per cent.
But analysts believe that this global growth is not being led by the PC and laptop markets, where Intel and AMD still reign supreme, but by the booming worldwide market for smartphones and tablet computers. The high-power chips developed by Intel and AMD consume too much power for mobile devices such as smartphones, which require the maximum possible battery life.
"Intel and AMD both manufacture chips that use the architecture that has traditionally powered PCs and laptops. Intel is by far the stronger of the two. Most laptops and desktops will have an Intel processor," says Tim Coulling, an analyst at the research company Canalys.
But he adds: "The mobile-phone market, however, uses processors based on ARM's architecture. ARM licenses its processor designs to third parties, like Apple or NVIDIA, rather than manufacturing itself."
New devices such as the Apple iPad are also taking market share from the traditional PC market. These devices are largely powered by ARM-designed chips and not by Intel or AMD chips.
And, according to Canalys, consumers no longer replace their PCs as frequently as they did.
"Consumers often now delay upgrading their PCs in order to be able to buy tablet computers and smartphones. Even older PCs often have enough processing power to meet their owners' requirements," says Mr Coulling.
The dilemma facing traditional chip makers is that their high-energy chip sets are designed for yesterday's IT devices and are too energy-hungry to be used in today's compact hand-held devices.
While there is still demand for high-performance PCs by consumer groups, such as dedicated gamers, the majority of consumers worldwide access the internet via hand-held devices such as smartphones and not via desktop PCs or bulky laptops.
"Not everyone wants to play high-resolution 3D games on a PC," says Mr Coulling. "Most people merely want to communicate and have some light applications and for their pads to provide a good-enough computing experience."
The big advantage of ARM chips is their low power consumption, which radically increases the battery life of smartphones and tablet computers.
"This is of concern to Intel and AMD, who are yet to make any real impression on this end of the market. Intel has long set its sights on the mobile space and is currently ahead of AMD," says Mr Coulling.
Intel has already demonstrated its Medfield chip set, which is designed for smartphones and tablet computers, and is pinning its hopes on products coming to market this year.
Jon Carvill, a spokesman at the company's US headquarters, says: "Intel is bringing its next-generation Atom processor to market which should start powering smartphones in 2012. This is a system-on-a-chip platform that is designed for low power consumption with the performance and connectivity needed to power key consumer applications in mobile devices."
He adds that Intel is targeting three key markets with this technology: smartphones and tablets; embedded computing, such as in the automotive industry; and the digital home.
AMD, on the other hand, is in danger of lagging behind chip developments in the smartphone industry as it pursues its PC chip strategy.
Drew Prairie, an AMD official, says: "We do not have plans at this time to enter the handset or smartphone space. The PC market will adapt and change with new form factors and offers plenty of growth opportunity for AMD based on our current road map."
As new mobile devices continue to revolutionise consumer IT, the global microchip landscape will also change rapidly, with former near-monopolies being supplanted by new chip companies.