During the Snapdragon Summit 2023 in October, Qualcomm made a big announcement by introducing the Snapdragon X Elite chip, built on TSMC’s cutting-edge 4nm process. Qualcomm’s claim is bold; they assert that the chip will deliver superior performance compared to Intel’s x86 architecture and Apple’s M2 chip. Simultaneously, towards the end of October, Apple revealed its own Arm-based M3 chip. Notably, semiconductor giants AMD and NVIDIA are rumored to be exploring the development of new PC processors on the Arm architecture. The future outlook suggests that Arm-based processors may gradually cut in the market share traditionally held by x86 architecture processors.

TrendForce’s Insights:

1. Qualcomm’s New PC Processor Poised to Expand the Arm-Based PC Processor Market

Following Intel’s September 2023 Meteor Lake processor release, Qualcomm introduced the Snapdragon X Elite, its latest Arm-based PC processor in October. This chip leverages TSMC’s advanced 4nm technology. Qualcomm is forging partnerships with Taiwanese heavyweights such as Quanta, Compal, Wistron, Acer, Asus, Realtek, Nuvoton and others, aiming to secure a foothold in the CPU market within the PC supply chain. This collaborative effort is expected to yield new PC products hitting the market in 2024.

As of 2023, Arm commands approximately 11% of the market share. Apple, a pioneer in PC chips built on the Arm architecture, has seen success with the release of three generations of processors since the 2020 debut of M1 chip.

With Qualcomm entering the Arm architecture group, AMD also intends to step into Arm architecture with the upcoming Phoenix processor, set for launch in 2025. There are also whispers of NVIDIA partnering with MediaTek to develop a chip processor featuring SoC+GPU capabilities on the Arm architecture, with an initial focus on ChromeBook market, where MediaTek boasts years of experience.

In the PC market, significant factors include processor development timelines, product performance, power efficiency, extended battery life, and compatibility with software and hardware. High-end CPUs and GPUs have become indispensable components for high-end computers. Currently, Intel leads the CPU market, with AMD following closely in the x86 landscape. As more companies delve into the development of Arm-based processors, there is potential for them to carve a share from the x86 market in the future.

2. Arm Architecture Processors Gain Momentum, Intel Focusing on AI Software Application Processor Development

Apple’s M-series chips demonstrate their efficiency and extended battery life. Microsoft recognizes the advantages of the Arm architecture and is dedicated to fostering a strategic collaboration for Windows on Arm. This collaboration involves integrating operating systems with processors to attract leading manufacturers to engage in Arm-based processor development, aligning with the growing demands for AI PCs.

In the realm of x86 architecture, Intel enjoys a dominant position in the CPU market. To tap into the opportunities arising from AI PCs, Intel has integrated AI acceleration engine features into its processors, introducing a new generation of AI application processors that combine CPU, GPU, and NPU (Neural Processing Unit) functionalities. This caters to the growing demand for generative AI applications in enterprise mobile PCs. Furthermore, Intel has joined forces with major laptop brands to launch new AI PCs, aiming to seize a substantial share of the market.

As momentum grows in Arm-based processor development, Intel maintains confidence that their immediate effect on the demand for x86 architecture processors will be restrained. It is unlikely to hinder Intel’s continuous advancement in developing new processors. Unlike competitors concentrating on Arm architecture processor development, Intel places a stronger focus on AI software applications and the market opportunities arising from its partnership with the Microsoft platform.

Explore more:

• [News] Qualcomm Challenges Intel & AMD in AI PC Chip Race
• [News] Intel, Samsung, TSMC Race in Cutting-Edge Processes

At this year’s Qualcomm Snapdragon Summit, the company announced its latest PC processor, the Snapdragon X Elite. With impressive performance metrics, this development is poised to shake up the PC processor market as Arm architecture gains ground, posing a substantial challenge to the established x86 architecture.

At this year’s Qualcomm Snapdragon Summit, the company announced its latest PC processor, the Snapdragon X Elite. The launch of laptops featuring the Qualcomm Snapdragon X Elite is expected in mid-2024, marking an opportune moment for a “counteroffensive.”

TrendForce indicates that Arm architecture PC processors have secured around an 11% market share this year, primarily propped up by Apple’s laptop processors. Industry insiders reveal that, in light of the growth potential in the PC processor market, semiconductor giants are increasingly adopting ARM architecture to venture into the market.

2024 Sees Laptop Upgrade Surge, Desktop Market Shrinks                  

Statistics reveal that the surge in remote work during 2020 prompted a shift in consumer preferences from desktop computers to laptops. Moreover, the ongoing establishment of cloud platforms by businesses in 2021 and 2022 has generated positive momentum, signaling a shrinking desktop market and an expanding PC market.

AI-powered PCs and Windows 12 next year are expected to ride a fresh wave of upgrades in 2024. Therefore, when PCs featuring ARM architecture become widespread, Intel and AMD may not be predominantly affected in the laptop processor business based on the x86 architecture. Instead, the desktop processor segment could face the most significant impact.

Kedar Kondap, Qualcomm’s Senior Vice President and General Manager of the Compute and Games Division, foresees an upgrade wave fueled by AI PCs next year, with further growth anticipated in 2025. It is expected that consumers will lean towards AI PCs for their next computer purchases.

The initial wave of products equipped with Qualcomm’s AI PC processors has been unveiled, aligning with the upcoming wave of device upgrades in next year. While Intel is set to launch its first AI acceleration engine, the Intel Core Ultra, featuring integrated NPU in December, its Microsoft Windows 12 certification remains a point of observation.

In a broader perspective, Intel and AMD are positioned to follow up with the AI PC trend by 2025. This coincides with the ending service of Windows 10 and the gradual implementation of Wifi 7 and 6G technologies. By 2028, they are expected to play a pivotal role in driving AI PC growth.

On another note, a South Korean analyst anticipates that the growth momentum in AI PCs hinges on when Apple incorporates AI features into Mac computers.

ARM vs. x86, Microsoft’s Crucial Role                                    

This is because Microsoft is set to launch Windows 12 next year, featuring the built-in Copilot AI assistant. It will collaborate with operating systems and software such as Windows, Edge, Microsoft 365, Outlook, and the Bing search engine, ushering in an entirely new AI-driven user experience.

Several tech giants are fiercely competing in the AI PC market, with NVIDIA and AMD investing in the development of Arm architecture processors. It’s worth mentioning that in 2016, Microsoft agreed to let Qualcomm exclusively develop Windows-compatible chips, and this agreement is set to expire in 2024. Consequently, Qualcomm may gain a strategic advantage. In contrast, the collaboration between NVIDIA and MediaTek on Arm processors might only begin to bear fruit in 2025.

As for AMD’s foray into Arm architecture research and development, whether this indicates a less optimistic outlook for the x86 market is a matter for ongoing observation. Intel CEO Pat Gelsinger expressed that he isn’t concerned about Arm architecture processors vying in the PC market. From a different perspective, Intel may even consider assisting with manufacturing.

(Image: Qualcomm)

• The continuous AI integration of smart homes accelerates with the Matter protocol.

In the context of the modern era, smart homes are the AI applications that come second only to smartphones and smartwatches. As the penetration rate of smart home devices increases, more and more AI-enabled devices are permeating into human life, ushering in a large-scale era of personalization. The realization of smart homes not only requires smart appliances but also sensors and energy management systems. The deployment of AI will enhance recognition and control.

The diverse application scenarios of smart homes result in a wide variety of products. Despite the vast market size, there is an issue of product ecosystem fragmentation, leading to slow deployment. This can be addressed through the integration of the smart home market via the Matter protocol. As Matter facilitates communication between different devices through software protocols, the importance of software in devices will increase with the product’s AI capabilities, catering to the demands of edge AI applications.

• The RISC-V architecture is on the rise, and the form of MCUs with NPUs will continue to proliferate.

Although CPUs in MCUs are currently dominated by the Arm architecture, open-source RISC-V is gradually rising. In addition to its features such as customization, modularity, and cost-effectiveness, RISC-V is expected to become one of the advantages in smart home applications. It continues to gain support and application from many major manufacturers, expanding the ecosystem of the RISC-V architecture.

Because TinyML models are much smaller than general-purpose AI, they do not require a large amount of computational resources for deployment. This makes them suitable for IoT devices or smart homes that require large-scale deployment, with significant advantages in both technology and cost. Furthermore, with the diverse range of products in smart homes and the increasing demand for product functionality, the form of MCUs equipped with NPUs will become increasingly common as they adapt to the product’s uniqueness and evolve with AI integration.