Both Intel and IBM are looking to become the leading next-generation chipmaker, although they cater to slightly different markets. Intel is the leading chip provider for PCs (and now has a stake in Apple’s Mac computers) while IBM’s chips power gaming devices like Microsoft’s X-Box 360, Nintendo’s Wii, and Sony’s PlayStation 3.
While IBM has made the developments in part with Advanced Micro Devices --Intel’s biggest rival-- Intel is likely to gain ground against AMD, Goldman says. This is in part because with the breakthrough, Intel’s CEO Paul Otellini also announced three new domestic factories capable of using the new “45 nanometer” technology, which refers to the width of a chip transistor (Intel had been previously making 65 nanometer chips). The new plants will be capable of mass-producing the new processors. “It’s the most important thing we can do to show strength over time,” Otellini says about the plant openings. In addition, Goldman says it could be good news for Intel’s domestic business – the company does about 80% of its business overseas.
And surely the chip breakthrough, along with the plant openings, will be significant for Intel investors. IBM is sure to benefit as well – so now the next question is which company can turn this technological breakthrough into long-term value for their bottom line.