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Tilera’s new Chip a Threat to Intel?

Tilera’s new Chip a Threat to Intel?

Silicon Valley startup Tilera says the new chip design it intends to unveil later this year will deliver 10 times the capacity and be more energy-efficient than Intel’s best microprocessor. Its design, which will pack 100 microprocessors, or cores, onto a single thumbnail-size piece of silicon, will result in faster, energy-efficient computers capable of performing more tasks simultaneously. Intel’s new Xeon chip by comparison has 10 cores.

According to Tilera Chief Executive Officer Omid Tahernia, current chips haven’t been able to keep pace with the requirements of giant server farms built by companies such as Google and Facebook. These data centers need to expand to handle growing e-mail, online video, and search traffic. Simply increasing the speed at which a processor handles instructions from software has its limits. That approach generates a lot of heat and requires expensive cooling systems. “

Tilera says it has created software tools to let customers switch to its chips, that it’s now working with the top 20 cloud-computing-center companies, and its chips have been designed into more than 50 computer models.

The company has received more than $100 million in financing since 2005, including $45 million that was raised in January. Its investors include Cisco Systems, Samsung Electronics, and Broadcom. Tahernia is projecting $100 million in annual sales by 2013, 20 percent less than Intel’s revenue on an average day in the fourth quarter of 2010. Tilera is challenging a company that controls 90 percent of the server chip market, with 100 employees to Intel’s 82,500. “We may be small, but we’ve solved some tough problems,” says Tahernia.

Hans Mosesmann, a chip analyst at Raymond James & Associates says, “They are the real deal. I haven’t seen this kind of story for a long time.”

Getting funded as a chip startup is a major challenge in the current investment climate, as technology investors recently have been favoring social media companies and mobile application developers.