Seeking Alpha
Long-term horizon, tech, growth, homebuilders
Profile| Send Message|
( followers)  

The move to 64-bit has been years in the making. But we did it because we wanted to put desktop-class processing power in the palm of people's hands. - Apple iPhone 5s design web page [emphasis added]

I began my article on the A7 chip from Apple (NASDAQ:AAPL) with this quote from CEO Tim Cook, and noted how Apple seems to have tipped their hand as to their future plans. Here I will discuss the A8 System on a Chip (SoC) that should be out sometime in 2014.

Caveat

  • I have no direct knowledge of Apple's plans. Therefore this article is educated speculation. To write the description of the A8, I am extrapolating from the current technology and other news.

In the quote, Cook referred to Apple's new A7 processor found in the iPhone 5s and the iPad Air. This is the very first 64-bit processor in mobile products, and is a major technological advance. It has upped the ante in the mobile processor arms race, with Samsung (OTC:SSNLF) indicating that it will create a 64-bit processor for next year's Galaxy S5, although it is unlikely that they will be able to have a 64-bit OS available in this time frame (as Apple does).

Note:

  • I believe it's important for the investor to understand some technological details of the industry in which they invest. Obviously not everyone can become an expert, but it's important to have a basic understanding in order to separate the inevitable hot-air from valid analysis, and to fully comprehend the import of a new technology.

Apple's iOS devices compete against those using Android by Google (NASDAQ:GOOG), led by Samsung, and WP8 mobile OS by Microsoft (NASDAQ:MSFT) led by their new acquisition, Nokia (NYSE:NOK). The competition is furious with Android systems taking the lead in units sold, but WP8 growing its share. Its flagship line, the Nokia Lumia series has proved very popular. In global smartphone market share, Android has moved to 80%, and Windows up to almost 4%. Microsoft's Surface tablets, however, performed very poorly last year, though the number 2 models, seem to be doing better (see here).

Significance

Aside from geek's techno-babble, in the previous article I noted the importance of the advance:

  1. Immediate implications in the smartphone wars,
    1. High performance - beats current phones and many tablets
    2. Apple now has a huge leap on its competitors
    3. Special security features allows secure TouchID
  2. Broader, industry shaking implications
    1. Indicates where it is going.

This article addresses this last point: where is Apple going? Why is it important?

But first

I also noted that the term "desktop class" is a bit of hyperbole. While the A7 almost doubles the speed of its predecessor in many compute intensive tasks, and may match the performance of low end netbook CPUs, it is still a long ways off of true desktop performance. Let's see if the A8 can make this jump.

[In this article I use DESKTOP as a system that is not a mobile or hand-held device, and therefore includes laptop computers (that are typically placed on a desk or table for extended use).]

Anatomy of the A8 SoC

Every chip is made with a specific "technology" that refers to the size of transistors on the chip. Obviously, the smaller each transistor, the more you can fit in each square centimeter. Also, the power need to drive the chip is reduced. So, when you go to a higher density technology, you can either shrink your design into a smaller space, or you can add complexity.

Apple's A7 was built on 28nm technology. Most likely the A8 will be built on 20nm technology by Taiwan Semiconductor Manufacturing Co (TSMC). The Taipei Times reported on Dec. 13:

  • [TSMC] yesterday said it is to start high-volume production of its most advanced 20-nanometer (NYSE:NM) chips next month, a move the chipmaker expects will give its revenue a double-digit boost next year.
  • The move would also make TSMC the world's leading contract chipmaker supplying 20nm chips.
  • Analysts say that mass 20nm chip production could put TSMC in a position to dethrone Samsung Electronics Co as the supplier of Apple Inc's next-generation A8 chip next year.
  • TSMC chairman Morris Chang (張忠謀) said in October that 20nm chips would start contributing to the firm's revenue in the second quarter of next year, following the launch of mass production in the first three months of next year.
  • "The 20nm system-on-a-chip is the most critical ramp-up TSMC has carried out in years. We will start high-volume production of this chip next month," TSMC president and CEO Mark Liu (劉德音) said in a keynote speech at the company's annual supply chain management forum in Hsinchu.

We know how Apple likes to use its "war chest" of cash to help suppliers build out capacity

This means that we can expect that the A8 will be a 20nm chip, and significant more complex than its predecessor. Just how different is the question.

Technical Note

A System on a Chip puts many pieces of functionality onto one chip that used to be on separate chips. The most important are the central processing unit (CPU) and the graphics processing unit (GPU). Both of these are processors in that they run "programs," but they are quite different. The CPU is designed for running general computer applications, everything from your file system to a word processor, a database to graphics and scientific programs. Its design is general purpose, and it is optimized for that. The GPU is designed to perform calculations for processing graphic and video images.

I give a more detailed explanation in my technical blog of the hardware components.

Measuring performance

Benchmarks are programs designed to test the speed and efficiency of computer systems. There are a lot of different benchmark programs, each with its target. Some test compute power, some graphics, and each of these has subdivisions. For example, some test graphic performance in games, while others test Photoshop performance. I have noted in the past that it is not a good idea to rely on just one test to judge a system, and when someone comes running to you exclaiming how his phone tops your phone, but gives just one test, then it is time to be skeptical.

Still, I will break that rule and use just two measures. The reason is that my intent here is not to judge between two specific systems, but rather is qualitative in nature and the numbers are designed only as examples of ballpark similarities. The question being: Will the A8 SoC be arguably comparable to existing desktop systems?

According to their website, "Primate Labs' flagship product, Geekbench, is the leading cross-platform processor and memory benchmark tool." It is in popular use, is well respected, and test many aspects of performance. I use this to discuss CPU and general system performance.

A GPU can rated on how many Floating Point Operations per Second - or a FLOPS -it can perform. This can stand in for a whole slew of specific tests, each with its own bias. It is somewhat theoretical in nature (i.e. does not necessarily correlate to any specific other test), but is good for our purpose. Modern GPUs are rated in giga-FLOPS, or 1 billion operations per second. I will use the ratings listed in reviews on the superlative AnandTech website as my guide. These should be relatively consistent, which is what we are looking for.

Where we stand - 1: CPU

Currently we stand with the new iPad Air, sporting the A7 processor, leading the iOS pack. The Geekbench scores are a stunning 1458 and 2642 for single/multi core tests. We need to note that these are all 32-bit tests because they do not have a 64-bit version for mobile processors.

The things to note here are:

  1. The scores are almost 2x from last year's iPad with the A6x.
  2. The scores are more than half the current low end MacBook Air, and virtually one half the 2012 Mac Mini.
  3. 28nm is only a 12.5% drop from 32nm, while 20nm is a 29% drop from 28nm.

To continue on point #3, since it is the square area that counts, if Apple does go to the TSMC 20nm process, then they will have almost double the real estate to play with if they stick to the same size chip. This would easily allow them to go to quad core processor.

(click to enlarge)

Where we stand - 2: GPU

The A7 GPU sports 4 processing cores that deliver impressive performance. Here we have two tables from AnandTech. The first shows the data for the new iPad Air, showing a rating of 115.2 GFLOPS. (Note: Integrated GPUs do not always run at the same speed as the CPU.)

(click to enlarge)

The second table with the peak speed in GFLOPS for several chips is just a little older, not showing the new A7. These are mostly GPU that are integrated parts of Intel Core series that are used in many Apple Macs and Windows PC computers. The current MB Air uses Intel Graphics HD 5000. Last year's model used the 4000.

(click to enlarge)

[Source: Anand Tech.]

Here the differences in performance are much greater. If a new chip evolved from the A7, it would need 6 times the processing power to match that of the current MB Air. But, to meet the performance of last year's HDG 4000, it would only need to triple. In fact, the i5-3210M used in the current Mac Mini listed above uses the 4000.

To understand the options here, we need to understand the GPU technology they use. The A7 uses GPU design PowerVR Series 6, also called Rogue, by Imagination Technologies Limited. They boast:

  • Highly Scalable, Programmable Processing Clusters
  • The USCs [Unified Shading Clusters] are multi-threaded processing units that are optimised for the operations used in vertex and pixel shaders and also practical GPU compute tasks (video and image processing, for example). The USC architecture is highly scalable, meaning that multiple clusters can be implemented with very little overhead (performance scales almost linearly with additional clusters). [emphasis added]

The rest of the handout discusses compute power, power efficiency, and other technical topics, but here is the key for this discussion: highly scalable. In the figure below, look at the yellow shaded area. This represents the thread cores, the units marked USC0, USC1… USCn (where "n" is any reasonable number). The architecture of the system is such that all the other logic remains virtually unchanged as you build in more of these USCs.

Therefore, tripling the compute power will not mean tripling the overall GPU area, and can be done without a lot of reengineering work. Of course the units in this diagram are not drawn to scale, so it is impossible to tell exactly how much the die will grow. Yet it is clear that this is a very manageable task.

(click to enlarge)

[Source: Imagination Technologies Limited]

Conclusion

With the jump to 20nm technology for next year's A8 processor, Apple will have real desktop power in its stock chip. It will be easy for Apple to double the power (or close to it) of the CPU, and triple the power of the GPU, and this will bring it right into modern desktop class.

I expect the A8 to sport a quad-core CPU, perhaps even a 5-core CPU with the fifth core running very low voltage for energy savings on background tasks. It will maintain the surprising lead it has on single core processing, and jump ahead in multi-core processing, since it will now also have 5 cores.

The A8 GPU will show a huge gain, sporting somewhere between 12 and 24 processing cores. It will jump to match at least Intel's HD Graphics 4000. Particularly in the tablet market, this will differentiate the iPad, particularly wherever the power is needed, such as scientific and medical graphic applications.

Obviously, this will be ideal for the new iPad Pro, the 13 inch model that speculation has coming early in 2014. While this is only rumor, not only is there so much noise on the topic, but it is clearly the next logical step, and so I think it very likely. In the next article in this series, I will discuss what this new A8 chip will mean for the new iPad, and what features to expect.

Critical!

As noted above, competition in the mobile device field is fierce. In spite of Android holding greater overall market share, Apple's iOS continues to dominate the premium market.

Apple has won a round with the introduction of TouchID and by being the first to use a 64-bit SoC. But head starts do not always last. Samsung has announced that they will introduce their own smartphone with a 64-bit processor some time this year. So Apple needs to maintain its lead if it intends to continue its dominance of the high end portion of the mobile market. This is absolutely critical for the company's continued success!

=====

Related Articles:

Apple's 64 Bit A7 - What It Really Means

Where have all the Androids gone?

December Surprise - Apple Trounces Dell

====

Source: Apple's A8 -- What It Will Be And Why It Matters