[The Exiled]

Intel Expects More Market Share Loss Throughout 2023, Will Likely Exit More Businesses

Intel CEO Pat Gelsinger spoke at the Evercore ISI TMT conference yesterday, saying that the company expects to continue losing data center market share throughout at least 2023 and will only begin regaining in 2025 and 2026. Gelsinger also said that the company would likely exit other businesses, much like it recently began exiting Optane memory, as it continues to narrow its focus to its core competencies. Intel's recently delayed its Sapphire Rapids launch again, with the chips now slated to arrive in 2023. Gelsinger remarked that while the new chips are 'better than the AMD alternatives" in power and performance and will win in some benchmarks, the advantages aren't dramatic enough to slow AMD's advance. As a result, Intel's data center business won't grow at the same rate as the market, meaning the company will continue to lose market share.

"Competition just has too much momentum, and we haven't executed well enough. So we expect that bottoming. The business will be growing, but we do expect that there continues to be some share losses. We're not keeping up with the overall TAM growth until we get later into '25 and '26 when we start regaining share, material share gains," Gelsinger added. Notably, the statement isn't definitive about the company's performance in 2024 — Gelsinger specifically stated that the company wouldn't begin regaining market share until 2025.

"Now, obviously, in 2024, we think we're competitive. 2025, we think we're back to unquestioned leadership with our transistors and process technology," Gelsinger said. AMD has already taken data center market share from Intel for 13 consecutive quarters, reaching 20.2% of the market, and Gelsinger's comments point to at least five more quarters of share losses — and perhaps more. Gelsinger pointed to the company's Sierra Forest processors as a key innovation that will help the company address the other chip architecture steadily siphoning off market share — Arm. The Sierra Forest Xeon processors have efficiency cores optimized to provide the utmost power efficiency and performance density, so they'll have higher core counts.. Intel's Sierra Forest processors, which the company designed at the behest of its largest customers, look promising. However, Sierra Forest isn't scheduled to arrive until 2024. Meanwhile, AMD's 5nm Bergamo chips, which employ 128 simplified 'Zen 4C' cores in a similar density-improving arrangement to address the same market segments, arrive a year earlier in 2023. While it's clear that Intel has several tough years ahead as it works to rebuild, Gelsinger did point to leadership changes that will help accelerate the turnaround.

Izvor: Pat Gelsinger