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Intel prepares ultra-small chips for Dick Tracy-style gadgets

By Noel Randewich

SAN FRANCISCO (Reuters) - Intel is working on a new line of ultra-small and ultra-low-power microchips for wearable devices like smartwatches and bracelets, a bid by the company to make sure it will be at the crest of the next big technology wave after arriving late to the smartphone and tablet revolution.

The new line of chips, called Intel Quark, will ship next year and include an ingestible version aimed at biomedical uses, Intel's president, Renee James, told reporters late on Monday.

The Quark chips will be five times smaller and 10 times more power efficient than Intel's Atom chips for tablets and smartphones, she said.

"We're very committed to not missing the next big thing," James said.

Intel Chief Executive Brian Krzanich and James spoke on Tuesday at the company's annual developer conference in San Francisco, their first major public appearance since their promotion in May, when Paul Otellini stepped aside as chief executive.

Krzanich said tablets made with Intel chips and priced at less than $100 would be on store shelves in time for this year's holiday season.

He was flanked by rows of Android and Windows 8 tablets, many of them with attachable keyboards - an effort by Intel to show conference attendees it has made progress in mobile.

Intel said the first chips made on its cutting-edge 14 nanometer technology would start production late this year and be available in 2014, helping it extend its competitive lead in manufacturing.

Intel's most advanced chips are currently made with 22 nanometer production technology, which is already more advanced than production lines at Intel rivals like Samsung and TSMC.

The world's biggest chipmaker, Intel dominates the PC industry, but it was slow to adapt its chips to be suitable for smartphones and tablets.

CLUNKY BRACELET

Intel's focus on wearable computing - a trend that for many Americans evokes images of Dick Tracy, the comic strip detective who sported a two-way wrist radio - comes as Silicon Valley eyes sophisticated computerized watches with touch-screens and other high-tech features.

Technology companies see wearables as a growth opportunity amid signs that explosive expansion in smartphones shipments since Apple launched its first iPhone in 2007 is receding.

Last week, Samsung Electronics launched the Galaxy Gear watch, and Qualcomm, an Intel rival, launched the Toq smartwatch in a bid to showcase its technology to potential manufacturers.

Krzanich showed off a prototype watch and clunky bracelet made with the Quark chips.

"The idea is not to bring these to market but to come up with devices that our partners can use to develop their own products in this open ecosystem, he said.

A three-decade Intel veteran seen as the company's manufacturing guru, Krzanich has said that under his leadership Intel will give much more priority to its Atom line of mobile chips. In the past, Intel's most cutting-edge manufacturing resources were reserved for making powerful PC chips, with Atom chips made on older production lines.

Processors based on technology from ARM and made by Qualcomm and Samsung account for most of the mobile market.

Intel has shown some recent signs of improvement in mobile, progress Krzanich is keen to build on. The company has promised major performance improvements in its new Bay Trail chip for tablets.

The Bay Trail chip is based on Intel's new Silvermont architecture, which is the most extensive overhaul of its mobile processors to date, with improved performance and lower power consumption.

Also on Tuesday, Intel launched a new line of its brawny Xeon chips for servers, a market it almost completely dominates. The new server chips have up to 50 percent better performance than previous versions and 45 percent more energy efficiency, Intel said.

Intel recently began shipping a low-power line of data center chips based on the Silvermont architecture, part of its strategy to defend its territory from smaller chipmakers hoping to use ARM technology widely used in smartphones to push into the servers.

(Reporting by Noel Randewich; Editing by Leslie Adler and Jim Marshall)

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