Let’s talk about CPUs. AMD’s x86 CPU market share has grown over the last few years, increasing 4.2 points year-over-year to 22.5 percent overall in the second quarter, according to Mercury Research. At the same time, Arm’s silicon partners like Apple, Qualcomm, Amazon Web Services and Ampere Computing are ramping up efforts in client computing and data center. What is Intel doing to defend its position in the CPU market for PCs and servers?
Do better products. It really just comes down to, if the products are better, we’ll do better. So what do I tell my teams every day? Do better products. Unquestioned leadership. Execute, execute, execute. Improve the quality experience. Improve how we support our customers. Engage them more deeply in that. And to me, that is the higher order bit.
Now, when you click to the next level, there’s a lot of things going on. Overall, it’s a supply-constrained market. As I said in the last earnings call, I see a period of reasonable [market share] and [average selling price] stability going forward, because its capacity limited at that point, and neither [Intel or AMD], if I can’t do a whole lot more, neither one is motivated to go try to steal a lot of share from the other and take price actions and so on, so it’s going be a period of relative stability as the products get better.
Though we will get more competitive as our products get better. We’re on a roadmap to do that, where Alder Lake, [the next generation of client CPUs], comes out soon. We’re ramping well today’s [client CPU] products. Sapphire Rapids, [the next generation of Xeon Scalable CPUs], launches early next year. Ice Lake, [the current Xeon Scalable generation], is ramping well. So one-by-one, every product is getting better, and we’re just putting a lot of emphasis on getting them better, supporting our customers and ramping with them, etc.
Obviously as we [improve] our manufacturing machine or process technologies, that helps us get better. With that and particularly with the Sapphire Rapids generation, key new technologies [will be introduced] —DDR5, CXL, PCIe Gen 5 — [showing] that we’re getting back to the platform leadership role that you’ve come to expect from Intel, where we define the platform for the industry. It’s open, but we become the reference design, and everybody starts building on those new innovations, so [it’s a] major new platform launch.
And when you think about the data center space, the role of Arm is very minimal today, and us getting our act together, I think it stays that way. I just don’t see that people want to go through all that hard, heavy lifting of changing the software environment for another architecture if there [aren’t] major [total cost of ownership] advantages on the table — and there [aren’t] if we’ve done our job well in that respect.
When you flip over to the PC side, we’re very happy with [what we presented at Intel] Architecture Day, bringing our hybrid solutions, where we have performance leadership and energy efficiency leadership with Alder Lake. We think that’s a game changer because we’re going to be able to compete on both dimensions where [AMD] is not.
We ultimately see the real competition to enable the ecosystem to compete with Apple. I was on the phone with [Microsoft CEO] Satya [Nadella recently]. “I’m finishing my exit from the Apple closed garden. I’m now on the open ecosystem of Windows and Android, and we’re making that happen.” But our experience has to be better. So that’s ultimately the tablet experience, the phone experience, the peripherals, the PC: They have to have a better experience, supported by a broad ecosystem of innovation. So that’s how we see that space, and ultimately Arm has won the mobile category. We’re now trying to draw our lines successively lower as we go deeper into the tablet and education space as opposed to that [Arm] ecosystem growing up.