Rough seas ahead at Intel: CEO Pat Gelsinger spoke at the conference Evercore ISI TMT shared his outlook and it’s not quite so rosy. In the data center segment in particular, a further decline in market share is expected until the once again delayed processors of the Sapphire Rapids type are available. According to the latest information, they should now appear in 2023. As long as they are not sold, AMD should have the upper hand for the time being. Gelsinger believes that Sapphire Rapids is better than AMD in terms of performance and power consumption, but logically there has been no proof so far.
“We expect our overall data center business to grow each year if we keep going. As we said, the bottom is in Q2 and Q3. But we believe we will still lose share at least into next year,” like Gelsinger. “The competition just has too much momentum and we didn’t work well enough. […] We won’t be able to keep up with overall TAM growth until later in ’25 and ’26 when we begin to recapture stake, significant stake gains,” added Gelsinger.
From 2024 you see yourself competitive again, from 2025 you want the undisputed market leadership. That’s already Granite Rapids/Sierra Forest on Intel 3. Time will tell if that works. AMD initially struggled to challenge Intel for market share, but it has also had a difficult time with the COVID pandemic, in which the acquisition of remote tools for employees was more important than new data centers. You need patience in the server business and it pays off when the product fits – AMD now has a 20.2 percent market share according to data from Mercury Research.
Intel shakes the cage
“Seventy percent of the executives, or the executives minus one, are new to the company or new to the role they hold, so it’s been quite a dramatic rebuild of the leadership team.” So Gelsinger swears his listeners to the dry spell, at the end of which a pot of gold should wait. To this end, they want to continue to limit themselves to core competencies. You always hear that from companies when their belts have to be tightened a notch. And so you want to say goodbye to divisions that run rather sluggishly. It wasn’t concrete, but it’s likely to be projects like the discontinued Optane business, in which you don’t see a future.
“Obviously Optane. And I always joke that Intel got out of the memory business 40 years ago and it’s made that decision over and over again. Right? Well, I’m going to close this damn door and we’re going to stay out of the memory business and our business strategy round.” to really clean up the logic,” says Gelsinger. “You know, we’ve got a few more that we’re probably going to retire from as we continue to rejuvenate and become more focused.”
Intel didn’t address the desktop business, but that can also be exciting, because in the end Raptor Lake is just an evolution of Alder Lake with more E cores, modified caches for the P cores and a faster IMC. The new PCH is, to a certain extent, identical in construction to the old one. That’s a modest amount of innovation compared to AMD’s Raphael, where the cards are already on the table.