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Michael Crawford has written a feature on the recent trend towards integration and what it menas to us as the trend continue. Its a nice little summary piece of something that has been happening in the industry lately.

The following was written by Slashdot Reader Michael Crawford

Integration:Where is it Going?

One trend that has recently been gaining a great deal of momentum is integration. Odds are that if someone has invented a useful piece of hardware someone else has plans to build it into either a CPU, a motherboard or a graphics card. Recent motherboards have built in sound, graphics, modems and other useful components. While Graphics cards are trying desperately to differentiate their products by including options like duel monitors and TV-out capabilities and graphics chipsets are adding features as fast as the features can be conceived. The graphics chipsets are even moving into areas that have traditionally been the CPU^Òs job such as geometry and lighting effects. While CPU designers such as Cyrix are pushing new chips that will eventually contain all of the basic computer components, including large portions of the motherboard and graphics chipsets, on a single chip. The eventual goal of this processes is called PCOAC(PC On A Chip). A single chip that performs all of a computer^Òs basic functions. This is the ultimate goal of the current attempts at integration. Why is this important you ask? It is important because over the next three years the computer industry will be drastically changed as a result of integration. Entire segments of the market such as motherboard chipsets and networking devices will vanish as these components are integrated into other, larger components. Watch for more and more soon to be obsolete companies moving out of their traditional markets in an attempt to survive. An excellent example is VIA^Òs acquisition of Cyrix. As PCOAC becomes standard the vast majority of VIA^Òs current business(low-end chipsets) will be rendered a obsolete. Thus they are in effect trying to escape to high ground before the flood arrives that will spell the end of most of their current competitors. Now you might ask why integrate?

The integration has two primary intended effects. One, the card, board or CPU in question gains the added feature that makes it more attractive to customers. Two, the use of less chips saves on system cost and power consumption. This is why current highly integrated systems tend to be intended for either the low-end of the desktop market or the laptop market. These systems are selling well and there are already plans to further the process, but the benefits are not without risks.

The main risks include that the systems that are currently available tend to lack performance when compared to more traditional systems and they are also more difficult to customize or upgrade. Because many different components are contained within a single chip the possibility of upgrading or changing the components is non-existent. Manufacturers also tend to believe that because a particular piece of hardware is already in the system the manufacturer does not need to make provisions for that component to be upgraded later. This is seen in recent motherboards without AGP slots. This loss of upgradeability could lead to consumers being forced to buy more computers than before. Computers already become obsolete quickly, without upgradeability the situation could become much worse. What I expect each segment of the computer industry to do as PCOAC approaches.

Things to remember, these are predictions that may only become true over several years, most of these predictions apply to the low and mid-range computer market. As a general rule the high-end will be effected last and least.

Motherboards/chipsets

Expect more and more components being built into each board. In a market where being different is good, look for the trend towards integration to be strong. At first these boards will be intended for the low end but early signs of the trend continuing into mid-range systems are already apparent. Once the motherboard makers run out of features to add they will start trying to increase the quality of features. Within the year relatively high-performance graphics and sound cards will be built into many boards. eventually the motherboard makers will lose influence over the industry while the chipset makers all but disappear.

Commentary: In the long run the motherboard manufacturers will do fine, they will have less control over their boards but they make a component not easily replaced and thus will exist for the foreseeable future. The independent chipset designers have much bigger problems. For the short term they will follow the trend like everyone else but in the long run they may cease to exist in their current form. They face several main challenges. They are a small relatively cheaply produced component trying to integrate very complex and expensive components such as video cards. This is a situation that is very similar to a small fish trying to swallow a big fish. They are also being held behind the technology curve by Intel (still the dominate player in the industry). Intel wants control of the chipsets and uses its patents and industry clout to prevent others from making Intel compatible chipsets until years after the new CPU has become available. The combination of being relatively cheap and largely powerless within the industry may lead to the demise of the independent chipset design companies. The chipset^Òs traditional tasks are likely to be integrated into CPU^Òs.

Graphics Cards/chipsets I expect to see more graphics chipset companies buying or being bought by graphics card manufacturers. This gives more control over the use and capabilities of a particular card/chipset combination to the company owning the design. A single company will be able to carry out every step in development and manufacturing and would be capable of locking out competitors. The buyouts allow the company that designs a successful combination to reap all of the benefits without clones dragging prices down.

The independent graphics card companies will disappear as the larger companies that design their own chipsets stop selling graphics chipsets to their competitors and are capable of maintaining lower pricing due to entirely in house product development.

Expect the graphics chipset companies to rapidly move into areas that have traditionally been the realm of CPU^Òs as they search for newer and better features to improve performance and differentiate their product. I will not be surprised to see many aspects of the CPU^Òs FPU to be taken over by the graphics chipset. Some of us still remember debating about which math coprocessor (FPU) to add to our system. This could emerge as an option on a graphics card in the next couple years.

Commentary: The graphics chipset design companies will remain relatively safe in the short term but may be in jeopardy in the long term. In the short term the industry is newly emergent (how long ago since the voodoo?) and moving at an incredible pace. New generations of chipsets are coming out faster than one per year. As long as this pace continues upgradability will outweigh the cost savings given by integration. In the long run however the pace of advance is sure to slow rendering the chipset design companies vulnerable. The major CPU companies will eventually try to devoir the chipset design companies. The CPU manufacturers are easily the largest and most influential within the industry and they will probably succeed.

CPUs For the short term the major CPU companies are preoccupied with the current struggle for dominance. They will try to gain the support of the graphics and motherboard makers and will not encroach into other markets until the CPU market stabilizes. The CPU will continue to advance as it has before with an ever increasing influence on FPU performance.

In the slightly longer term special CPU^Òs designed for the low end computer market, unlike the K6 which was intended as a top of the line chip but failed in that role or the celeron which for all practical purposes is a P2, will bring integration to new levels. Both Cyrix and Intel have publicly announced plans for a PCOAC design.

Eventually (2 or more years) the CPU will become a single giant conglomeration of components including the motherboard chipset and graphics chipset. It will be in effect the only portion of a computer with any significant control over performance. AKA :PCOAC

Commentary: Many people will say that this will never happen because of the lack of upgradability and that the consumer will not buy it. The problem is that this really will be Much cheaper and Much higher performance. It may never make its way into some markets but it will become the standard. I suspect that the companies that will eventually be left in control are the CPU companies. This is because they are the biggest and are in the best situation to carryout the integration. Two excellent examples are Intel and Cyrix. Intel is just huge, they are already in every market discussed above. Intel makes chips, chipsets, graphics chipset, motherboards (including highly integrated ones) and numerous other networking and specialty devices. They have publicly stated that they are developing PCOAC designs and they have the money and designers to do it. This is a perfect situation for Intel. If successful they would have almost Complete control of their computer. (we all know Intel would like that). Cyrix is in almost as good a situation as Intel. Cyrix has recently been bought by VIA. Giving them a new shot at the CPU market with new tools. Between VIA and Cyrix, Cyrix has access to almost everything it needs to pull of the ultimate feat of integration first. Via makes chipsets (including highly integrated ones) Cyrix makes CPUs (including highly integrated ones) the only thing lacking is a competitive graphics chipset program but that could be acquired. Where PCOAC is concerned Cyrix has the lead in both time and technology. It already has chips like the MediaGX that are the current best examples of integrated CPU^Òs (it contains many memory and graphics functions) and they have more on the way. Only time will tell if Cyrix will be able to stay ahead of Intel in this department. It might pull it off assuming Intel is too distracted with AMD to develop PCOAC seriously. AMD might be the exception where integration is concerned. They have excellent CPU designs and have expressed some interest in PCOAC but lack the experience. They only recently began chipset and motherboard design and have no graphics or other programs to speak of. They might be able to pull it off but will need to either invest in some new companies (see my AMD predictions) or form some partnerships within the industry (something AMD has done a lot of). It is unlikely AMD will be the first or second to make a PCOAC. Don^Òt forget that there may be others out there working on PCOAC besides the big three CPU manufacturers. Recent rumors imply that both Transmeta and ATI are moving in that direction and it is a safe bet that IDT and Rise will make a go at it. As more and more companies try to get in on the CPU business expect the market to change drastically. Only time will tell.

The Rest For the foreseeable future RAM and hard drives will be unaffected. Networking components will become just another feature on either a motherboard or a CPU. Most other components will be integrated

Commentary: If it is small and a chip it will as a general rule be integrated. If it is not a chip (ex: Hard drives) it is probably impossible to integrate. Many little companies will vanish when they are rendered obsolete by highly integrated components

You can read more of Michael's writing at his homepage.