Intel’s Earnings ‘Collapse’ And Its Comeback Plan: 7 Things To Know

How Solution Providers Feel About Intel’s Turnaround Prospects

Solution provider executives acknowledged that Intel has some tough challenges ahead but said the chipmaker still has what it takes to make a correction and return to a leadership position.

“I think they’ll get there. It’s going to take some time. It’s going to hurt a bit,” said Alexey Stolyar, CTO of International Computing Concepts, a Northbrook, Ill.-based system integrator.

One challenge Intel will continue to face is the data center market, according to Stolyar. He said there is still uncertainty about whether Intel can deliver products on a timely basis, citing multiple delays of its fourth-generation Xeon Scalable CPUs, code-named Sapphire Rapids, before they launched last month.

“They were late on releasing Sapphire Rapids [and other products] for the last few years, so there’s not a lot of confidence in them in terms of the release structure,” he said.

Stolyar said Intel will also have to contend with an increasingly competitive AMD, whose latest EPYC server processors are giving the rival a greater edge in workloads like high-performance computing.

“Where they hurt the most, I think, is in high-performance computing and true compute environments. AMD is just dominating there,” he said.

One thing that is helping Intel through this rough patch, according to Stolyar, is the company’s strong software support and independent software developer ecosystem.

“I do think they have better integration with software and things like that. If there are a lot more ISVs that are involved, they do have a better ecosystem. And so that’s going to keep them alive,” he said.

Nvidia’s decision to use Sapphire Rapids for its new DGX H100 system will also steer more interest for Intel’s latest server chips, according to Stolyar. He said a lot of customers have been making requests for DGX systems or systems with similar specifications. More often than not, that means Intel instead of AMD due to Nvidia’s processor shift for the GPU designer’s new flagship AI system.

“There are some customers who would say, ‘hey, give us both options and we want to explore it.’ But most customers are following the DGX platform, which is Sapphire Rapids,” he said.

Dominic Daninger, vice president of engineering at Nor-Tech, a Burnsville, Minn.-based system integrator, believes the increased competition from AMD will keep pushing Intel to do better, but he said the number of challenges facing the x86 giant now are unprecedented.

“I’ve seen pretty dark clouds over them before, and they’ve been able to work their way out of it. This one might be slightly worse than I’ve seen before. I saw the sleeping giant wake up there when AMD was the first one to get to a gigahertz, for example,” he said.

One thing that’s hurting Intel, according to Daninger, is that it’s been behind Asian foundry rivals TSMC and Samsung in advanced manufacturing technology, which is giving competitors like AMD access to nodes that are more powerful and efficient than what Intel can currently produce.

“AMD is going to give them a really good run for their money, and there’s no question. We’re seeing market gain of AMD in the server arena, both within our company and what I’m seeing reported in general. And you look at the benchmarks, it’s not a surprise. When you’ve got somebody with that much lead on the fab technology there, that’s not at all surprising to see what we’re seeing,” he said.

But that situation will eventually change as Intel makes progress with Gelsinger’s comeback plan, gets ahead with new manufacturing nodes and builds more fabs, according to Randy Copeland, CEO of Velocity Micro, a Richmond, Va.-based PC system builder.

“I think the investment in fabs is going to pay off quite nicely over the next decade,” he said.