Not true. As has been said by MS, they'd have chosen a 10 GHz single core over XeCPU any day. The reason for going multicore is clockspeeds have hit a limit on current complexity, so the only way to get more power is to add more cores (assuming you're already efficient with your single-core architecture).
The problem is you can't make something complex and fast, that's what went wrong on the P4, it tried to do both. The problem has hit everyone now though.
The old people now really pushing clock speed is IBM, POWER6 is expected at over 4GHz but it's not as complex as POWER5.
Thus multicore has no limits in that you can keep increasing the number of cores, whereas single core is limited to fabrication techniques and clockspeeds and offers a peak-performance bottleneck compared with multicore.
Multicore does have limits, just different ones.
To double the number of cores you have to more than half the power consumption per core. That's not easy.
Then there's connecting all the cores together and keeping the caches consistent, this adds complexity limiting the clock speed. STI have been very clever here in that the SPE's local stores do not need to be consistent with each other, makes them much easier to scale.
A huge problem is software, very little is written for multiple cores.
Best of all is Amdahl's law which poses fundamental limits on the speed ups you can get by going parallel...
That said someone did a chip with 4000 cores a couple of years back...
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Out of personal interest - where would you like to see the current design go, assuming some 5 times greater transistor budget?
At 32nm thats 8X more transistors.
I reckon Cell will break into branches with high end and low end versions, I'd like to see a high end version with better dual precision support and a POWER6 core instead of the PPE. Bigger LS would always be useful as well.
They could add things like branch prediction and hardware threading but they may slow it down in some areas. They already have SPE software threading in the works (8 threads per SPE), I'm very curious to see how well it does on the stuff Niagara does well on.