New demands boosting chipset market to $10 billion

The PC core-logic chipset market is expected to grow from an estimated $6.9 billion this year to $10.3 billion in 2009, according to analysts at chip research firm In-Stat.

The report published Monday, entitled "The Trendy Chipset for the x86 Processor," suggests that continued demand for new PCs, combined with new semiconductor processor standards, will help build an industry that's populated by the likes of Intel, Broadcom, Atheros, Via Technologies and Silicon Integrated Systems.

"The chipset is a critical component in the PC design, and chipset designs are changing rapidly to support these new features," said Chris Kissel, an In-Stat analyst.

For example, the next generation of chipsets will be required to support processors with multiple cores, new front-side bus architectures, new peripheral interfaces and a growing list of demands such as managing security and running multiple operating systems, Kissel said.

Newer chipsets have generally included functions provided by two or more older chipsets such as Intel's 955 Express chipset, which combines high-speed storage interface and high-definition audio. In some cases, older chipsets that required two or more physical chips can be replaced with a chipset on a single chip like Intel's 855 Centrino chipset, which adds in compatibility with wireless networks.

The reliance on chipsets has come to the forefront in the last few years because processors made by Intel, Advanced Micro Devices and IBM are running into problems with heat and performance. What used to be a race to show off the fastest processor has now turned toward chipsets as the gauge of a successful chip. For example, one chipset may provide the basic functions of a modem and direct traffic along the motherboards without having to go through the CPU.

The challenge for PC chipset vendors, Kissel said, is to make sure the chipsets meet all of the latest requirements and integrate as many features as possible without undue expense.

Other new factors are coming into play, according to Kissel's report. One is the increase in chipset production supporting AMD's Athlon and Opteron processors.

Unlike Intel, AMD relies on outside vendors to make its chipsets. Although less than 20 percent of x86-based processors like the Pentium or Athlon have an integrated memory today, In-Stat forecasts that roughly 70 percent will have integrated memory controllers in 2009, a trend similar to what happened in embedded processing.

Another factor is that PCs are also seeing a shift from their traditional processor-to-motherboard interfaces to ones that use PCI Express. The high-speed data transfer technology is expected to account for more than 84 percent of all graphics interfaces and 98 percent of all peripheral interfaces in 2009, according to In-Stat.

And as processors increase in the number of cores and the amount of memory, In-Stat said, chipsets will need to rely on more external logic for faster data transfer.