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Intel pressing for expanded mobile role

In this photo taken July 12, 2010, the exterior of Intel Corp. headquarters is shown.
In this photo taken July 12, 2010, the exterior of Intel Corp. headquarters is shown.
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Firm prepares trials of its server chips in wireless base stations

SAN FRANCISCO – Intel Corp. doesn’t want to be left behind by the mobile-device revolution.

So the world’s largest semiconductor maker is now working to put its server chips into machines that help bring smartphone data closer to users.

The company is preparing a trial with Nokia Siemens Networks and South Korea’s SK Telecom Co., where its chips are being deployed in base stations – wireless network antennas that include computers.

The goal is to ease the congestion caused by an explosion in demand for data and services, said Intel Vice President Rose Schooler.

For Intel, the effort is another attempt to offset the impact that mobile devices are having on the personal-computer market that provides the majority of its revenue.

Intel’s server chip business grew sales 7.5 percent to $2.59 billion in the first quarter, compared with a 6 percent decline in sales of PC chips to $7.99 billion. The company will report its second-quarter performance today.

Putting server chips into base stations “is a multihundred-million-dollar opportunity for us at a minimum,” Schooler said. Commercial use may begin next year, she said.

Chief Executive Officer Brian Krzanich has said he will accelerate attempts to get Intel’s processors into smartphones, where it has less than 1 percent market share, according to Strategy Analytics.

The company has had to settle for a dominant share – more than 90 percent – in the smaller market for servers that supply phones and tablets with information from data centers, according to Mercury Research.

Success in this latest effort will hinge on Intel’s ability to convince potential customers such as Nokia Siemens, Ericsson, the largest maker of wireless networks, and Huawei Technologies to build new equipment based around its chips.

Globally, mobile data traffic will grow 13-fold from 2012 to 2017, a compound annual growth rate of 66 percent, according to Cisco Systems. By the end of the forecast period, mobile traffic will be five times the volume for the entire Internet in 2005.

One of Intel largest chipmaking plants is in Rio Rancho, where it employs about 3,300 people.

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