Intel Faces Setbacks in AI and Server CPU Markets Amid Leadership Changes

Analysis: Intel Seeks To 'Stabilize' Waning Server CPU Share, But It Faces AMD And Other Challenges

While interim Intel co-CEO Michelle Johnston Holthaus says 'this year is all about improving' Xeon's competitive position 'as we fight to close the gap to competition,' the semiconductor giant is facing challenges in the form of AMD, Arm and a delay for a key product. After failing to achieve its modest revenue goal for AI accelerator chips last year, Intel's ambition to compete with Nvidia was dealt another blow when it announced last week that it would cancel its next-generation Falcon Shores AI chip that was due in late 2025. With Intel now turning its focus to a successor AI chip called Jaguar Shores set for release further into the future, the semiconductor giant is facing a greater sense of urgency to protect its data center business by defending its dominant but waning server CPU market share against AMD and companies developing Arm-based alternatives. [Related: 8 Big Comments By Intel's CEOs On Its AI, PC, Data Center And Foundry Efforts] Michelle Johnston Holthaus (pictured), interim Intel co-CEO and CEO of Intel Products, said during Intel's earnings call last week that "this year is all about improving" the competitive position of its Xeon CPU products "as we fight to close the gap to competition." The company's Xeon 6 CPUs with performance cores, code-named Granite Rapids, "has been a good first step" after they debuted late last year, according to Holthaus. Intel is also "making good progress" with Clearwater Forest, its next-gen Xeon processors with efficient cores that will debut in the first half of 2026 as the first server product to use the Intel 18A manufacturing process, she added. (Intel 18A is the last node in former Intel CEO Pat Gelsinger's comeback plan to surpass Asian foundry rivals TSMC and Samsung.) Holthaus said all this work provides a "strong foundation on which to build," noting that most of the world's data center workloads "still run on Intel silicon" along with the company's "strong ecosystem, especially within enterprise." "We are going to leverage these strengths as we work to stabilize our market share in 2025," she said. It's an important fight for Intel. In November, CPU-tracking firm Mercury Research reported that AMD's share in the x86 server CPU segment reached 24.2 percent against Intel, which means that the rival is two points from reaching the record it hit in 2006. This, along with AMD's early success in the AI accelerator chip market, allowed the competitor to make nearly as much data center revenue as Intel did last year. Intel is also facing a threat in the form of Arm, whose instruction set architecture that has dominated smartphone chips is now the basis for custom server chips designed by Amazon Web Services, Microsoft Azure and Google Cloud for their own infrastructure. In fact, AWS said in December that more than half of the new CPU capacity it brought online over the last two years was based on its Arm-based Graviton chips. Two major ways Holthaus said Intel plans to win back server CPU share is "by re-engaging the x86 ecosystem" with the recently formed x86 ecosystem advisory group -- which has the backing of Microsoft, Dell Technologies, Google, AMD and other major tech vendors -- and by building semi-custom and custom solutions, like it is doing for AWS. Holthaus also noted that Intel "has a leading position as the host CPU for AI servers, and we see a significant opportunity for CPU-based inference on prem and at the edge as AI-infused applications proliferate." Another element that will help Intel compete is competitive pricing. In response to a question from a Wall Street analyst on whether competitive pricing will weigh down product margins throughout the year, Holthaus said Intel needs to win every deal it can. (Intel reportedly cut the prices of its Granite Rapids CPUs by as much as 30 percent last month.) "We have to stem the tide of share loss in data center, and so we will be fighting for every socket in that business. And the way I look at it is we need to be aggressive, we need to win share, and we need to show our customers that they can win with us," Holthaus said. Intel Global Channel Chief Dave Guzzi told CRN in an exclusive interview in January that while the company has cut its direct partner coverage by an unspecified amount, it has increased funding for partner incentive and investment programs, which includes money used for winning customer deals when Intel is faced with a competitive bid. While Holthaus touted Intel's Xeon 6 P-core Granite Rapid CPUs as a positive step in becoming more competitive again, she suggested the other side of the Xeon 6 lineup featuring E-cores, known as Sierra Forest, isn't getting the traction it had hoped for. "What we've seen is that's more of a niche market, and we haven't seen volume materialize there as fast as we expected," she said. Whereas the Xeon 6 processors with P-cores continued Intel's legacy of delivering high-performance CPU cores in servers, the E-core chips are optimized for efficiency, allowing the company to deliver a higher number of cores with lower energy consumption. With Intel pushing the E-core processors for cloud-native and telecom workloads, the chips have been viewed as Intel's response to the high-density, energy-efficient custom Arm-based processors that are allowing Intel's largest cloud customers -- AWS, Microsoft Azure and Google Cloud -- to lower their reliance on the semiconductor giant. Intel has also been faced with Ampere Computing, a chip design startup founded by former Intel executive Renee James that provides its own Arm-based processors with high core counts and low energy consumption for cloud-native workloads. But while Ampere originally planned to go public through an initial public offering, Bloomberg reported Wednesday that Japanese investment giant SoftBank is in advanced talks to acquire the company, whose primary backer has been Oracle. On the other hand, Qualcomm, which has begun selling custom Arm-based chips for PCs, has signaled that it plans to enter the server market with the recent hiring of Intel Xeon chief architect Sailesh Kottapalli, among other developments. Then there's AMD, which beat Intel in releasing energy-efficient x86 server CPUs with high core counts for cloud-native workloads in 2023. The chip designer then released a follow-up to its cloud-native server chips last year. During AMD's earnings call on Tuesday, the company's CFO, Jean Hu, didn't seem fazed that Intel planned to fight hard this year, saying that the chip designer "always" assumes that the server CPU market is "very competitive." She added that AMD has the "best lineup" and the "best" total cost of ownership with its fourth- and fifth-gen EPYC CPUs. "So overall, we are actually quite confident about [continuing] to drive the server CPU business," which is growing in unit sales, average selling prices and market share, she said. In the same call, AMD Chair and CEO Lisa Su said the company's server business "has been performing extremely well" between cloud and enterprise customers. According to Su, the company has seen "some strong traction" in the enterprise thanks to go-to-market investments it made last year -- which the leader of AMD's server CPU business detailed in a CRN interview a few months ago. "The enterprise sales cycle is often a six- to nine-month sales cycle, but as we've invested more resources in it throughout 2024, we've seen that convert into a significant number of new [proofs of concept] that are now converting into volume deployments," she said. The other challenge Intel is facing is an internal one. On the company's earnings call, Holthaus acknowledged that Intel's plan to release its next-gen Xeon E-core product, Clearwater Forest, in the first half of 2026 amounts to a delay from the original 2025 timeframe the chipmaker had given. Clearwater Forest has been seen as a strategically important product in large part because of how it will be the first server CPU to use the Intel 18A node, which the company has repeatedly said will allow it to surpass the advanced chip-making capabilities of TSMC and Samsung. Several months before Gelsinger abruptly left the company as CEO, he said the product would allow Intel to "accelerate share gains." Despite the delay, Holthaus said she still has high hopes for Clearwater Forest. "It does have some complicated packaging expectations that moved it to 2026, but we expect that to be a good product and continue to close the gap as well. But this is going to be a journey. It's not a destination," she said.

Intel has missed the boat for AI in the datacenter

Comment Any hope Intel may have had of challenging rivals Nvidia and AMD for a slice of the AI accelerator market dissolved on Thursday as yet another GPU architecture was scrapped. Falcon Shores, which was due out this year and was expected to combine the best of Intel's Xe Graphics capabilities with Gaudi's AI grunt, will never leave the x86 giant's labs, interim co-CEO Michelle Johnston Holthaus revealed on the corporation's Q4 earnings call with analysts Thursday. "We plan to leverage Falcon shores as an internal test chip only, without bringing it to market." The decision means Intel is likely to be another year if not two out from launching its next GPU architecture, codenamed Jaguar Shores, and that assumes it doesn't suffer the same fate as Ponte Vecchio, Rialto Bridge, and now Falcon Shores. That's right, this isn't the first or even second time that development of a GPU capable of taking on Nvidia let alone AMD has been cut short by Intel. Nearly two years ago, Intel axed Rialto Bridge, the successor to its datacenter-class GPU Max chips slated to power America's Aurora supercomputer. At least those earlier Max chips saw limited deployments by the likes of Argonne National Laboratory in the US, the UK's Dawn super, and Germany's SuperMUC-NG Phase 2 system. We say limited because Intel ended up pulling the plug on GPU Max in mid-2024, presumably to focus on its Gaudi family of accelerators -- more on those later -- and prepare for the Falcon Shores debut. Given this context, the demise of Falcon Shores, in some sense, felt inevitable. Intel's roadmap had it set for a 2024 release, but that was pushed back a year around the time Rialto Bridge was binned. Back then, the Falcon Shores project included an XPU variant that combined CPU and GPU dies on a single package. In mid-2023, those plans were pared back, leaving a more traditional GPU approach. Now Falcon Shores is basically dead entirely. Despite going one for three on high-end GPUs so far, Intel isn't entirely out of the AI game just yet. The x86 player still has its Gaudi3 accelerators. On paper the accelerators didn't look half bad, when they were unveiled in April. The dedicated AI accelerator boasted 1,835 teraFLOPS of dense floating-point performance at either 8- or 16-bit precision. For compute-bound workloads commonly run at BF16, Gaudi3 boasted nearly twice the performance of Nvidia's H100 or H200. For memory-bound workloads, such as inference, Gaudi3 packs 128GB of HBM2e memory good for 3.7 TBps of bandwidth, enabling it to contend with larger models than Nvidia's H100 while theoretically providing higher throughput. Unfortunately for Intel, Gaudi3 is no longer competing with H100s. While it made its debut in early 2024, the part only began trickling out to system manufacturers late last year with general availability slated for this quarter. That means potential buyers are now cross-shopping the part against Nvidia's Blackwell and AMD's MI325X systems. For training, Blackwell offers greater floating-point precision; more, faster memory; and a substantially larger scale-up domain. Meanwhile, AMD's MI325X boasts twice the capacity, and 62 percent more memory bandwidth, giving it the edge in inferencing where capacity and bandwidth are king. This might explain why despite then-CEO Pat Gelsinger's insistence that Gaudi3 would drive more than $500 million in accelerator revenue in the second half of 2024, Intel fell short of that target. And that's despite an extremely competitive price point compared to Nvidia. There could be all kinds of reasons for this, ranging from system performance to the maturity of competing software ecosystems. However, Intel's bigger problem is that Gaudi3 is a dead-end platform. Its successor was supposed to be a variant of Falcon Shores that from what we understand was supposed to mesh its enormous systolic arrays with Intel's Xe graphics architecture. Perhaps we'll see Gaudi3 win some ground in 2025, but given the complete lack of an upgrade path and uncertainty around Jaguar Shores, it seems unlikely many are going to take the risk when alternative platforms from chip designers with proven roadmaps and track records are available. Regardless of which GPUs or AI accelerators datacenter operators end up buying, they still need a host CPU, so Intel won't be cut out of the AI datacenter entirely. "We have a leading position as the host CPU for AI servers, and we continue to see a significant opportunity for CPU based inference on-prem and at the edge as AI infused applications proliferate," Holthaus told Wall Street this week. We continue to see a significant opportunity for CPU based inference on-prem and at the edge Intel's Granite Rapids Xeons launched last year have proven to be its most compelling in years, boasting core counts up to 128 cores, 256 threads, support for speedy 8,800 MT/s MRDIMMS, up to 96 lanes of PCIe 5.0 per socket. However, this segment is getting a lot more competitive. It's hard to ignore the gains AMD continues to make in the datacenter with its Epyc processor family. The Ryzen slinger now commands about 24.2 percent of the server CPU market, according to Mercury Research. Meanwhile, Nvidia, which is a long-time Intel partner having used its CPUs in several generations of DGX reference designs, is increasingly relying on its Arm-based Grace processors for its top-specced accelerators. Nv still supports the HGX form-factor with eight GPUs per system that we've grown accustomed to, and so Intel still can win share in this arena -- for now. But with, AMD making a point of how well optimized its Turin-generation of CPUs are for GPU servers, we anticipate vendors will gravitate to some degree to all-AMD configurations with Epyc and Instinct for their builds, further inhibiting Intel's ability to compete in this space Intel's opportunities to capitalize on the AI boom may be shrinking in the datacenter, Chipzilla still has a shot at the network edge and on the PC. Like most personal computer hardware makers, Intel has been banging the AI PC drum even before Microsoft spilled the beans on its 40 TOPS Copilot+ performance requirements. And while this led to a somewhat awkward moment in which Qualcomm was, for a few months, the sole supplier of Copilot+ compatible processors, both AMD and Intel were able to catch up with the launch of Strix Point and Lunar Lake in July and September, respectively. As we explored at Computex, Lunar Lake boasts a 48 TOPS NPU alongside a GPU and CPU, and Intel claims the system-on-chips can deliver 120 total system TOPS between the three. However, more importantly for Intel, it still controls the lion's share of the CPU market for PCs. And while just how important these AI features will ultimately be for PC customers is still up for debate, and Intel faces stiff competition from AMD, Qualcomm, and Nvidia at the higher-end of the PC spectrum, it's squarely in the race. Along with the emerging AI PC market, Intel's CPU strategy could help it secure wins at the network edge where it can flex the Advanced Matrix Extensions (AMX) compute blocks that have been baked into its CPUs going back to Sapphire Rapids to run machine-learning and generative-AI workloads without the need for a GPU. Intel has previously demonstrated 4-bit quantized 70-billion-parameter LLMs running at reasonable 12 tokens a second on its Granite Rapids Xeons, thanks to its MRDIMM memory support. Extrapolating this performance out, we'd expect to see generation rates of around 100 tokens a second for an 8-billion-parameter model, at least for a batch size of one. As we've previously explored in detail, the economics of CPU-only AI still aren't great with batch size being one of the limiting factors. But, for a network edge appliance which might only need to run models periodically, this not only wouldn't be a problem, but it'd potentially help to eliminate complexity and points of failure compared to GPU-based solutions. If the rebirth of AMD in the post-Bulldozer era teaches us anything, it's not to count an Intel come back out. When Ryzen and Epyc made their debut in the late 2010s, the parts weren't the most performant, but they were differentiated, offering customers something they couldn't get from Intel: Loads of cheap good-enough cores. In the GPU space, AMD employed a similar strategy, first focusing on delivering better performance in high-performance computing (HPC) applications than Nvidia. This helped AMD secure several high profile wins for its Instinct accelerators with America's Frontier and more recently El Capitan supercomputers. With its MI300-series accelerators and the pivot to AI, AMD differentiated again, targeting higher memory capacities than Nvidia could offer. This helped it secure wins from major hyperscalers and cloud providers, such as Microsoft and Meta, who were trying to reduce the cost of memory-bound workloads including inference. We bring this up because the decision to scrap Falcon Shores presents Intel an opportunity to start afresh and build something unencumbered by architectural decisions no longer representative of what the market actually wants. The decision to refocus Jaguar Shores toward a rack-scale design is a promising sign of what's to come. If Intel can find a way to differentiate its next GPU and provide something customers want but simply can't get from its competitors, it at least stands a chance of reestablishing a foothold in the datacenter. ®

"Not everybody has a killer app for AI yet.": Intel's Robert Hallock opens the company playbook on AI, NPUs, and more

To say 2024 was a rough year for Intel may be an understatement. But, as Intel's Robert Hallock told Laptop Mag, "You can't go backwards. That's unacceptable." Even after various setbacks in the past year -- from the beleaguered Arrow Lake desktop launch to speculation about the company's direction and the resignation of CEO Pat Gelsinger -- Robert Hallock, the company's Vice President and General Manager of Client AI and Technical Marketing, says Intel has no choice but to look forward. That forward focus means Intel intends to future-proof its desktops and laptops for when AI becomes a key component of all computing. This philosophy is everywhere at Intel, from the successes of Lunar Lake to the enthusiast skepticism of AI, NPUs, and Arrow Lake-S. "If you didn't do the investment in AI; if you didn't get your software house in order; if you didn't get your hardware house in order, then suddenly what is now a core ingredient of performance and power - where maybe it wasn't two or three years ago - you're upside down," Hallock explains. So what drives Intel today, and what can we expect in the years ahead? "What [performance and efficiency] metric does someone care about?" Hallock mused in a recent interview with Laptop Mag. "A lot of time this year was spent on battery life, a lot of time this year was spent on AI. Is that the right answer for everybody? Probably, probably not." What Intel can do is offer an option for nearly every user. It's a benefit of having a massive, diversified CPU business. "As we think about the market from the Intel side, what are they going to value more?" Hallock mused. Of course, Intel's market considerations don't just account for the customer but also Intel's OEM partners that make laptops and mini-PCs, like Dell and Asus. "Is it packing in more CPU cores? More GPU performance? Are they going to value a larger NPU? I know what choice I'd make: I want more CPU cores because I'm an enthusiast. "The cool thing about being at Intel is we have the road map flexibility to do that." After all, Arrow Lake and Lunar Lake CPUs are two very different products with different strengths and weaknesses. The key differences between the two chips are a matter of need: Arrow Lake offers higher thermal design power with a lower-powered NPU, while Lunar Lake is a lower-power (30 watts and under) system with a more powerful NPU. But the final word on those chips will always be the same, Hallock says. "The end of the day, it's still going to be performance and power." But what about the NPU? Do people care enough about the NPU here at the start of 2025? While some may consider the less-powerful NPU on Intel's Arrow Lake CPUs to be a miss, especially among the enthusiast and performance markets, Hallock compares the NPU to the rise of the iGPU. "Integrated [graphics] on the CPU started by being ridiculed... But you know that the whole point was just to light up a display for someone." These days, including an integrated graphic tile on a CPU is now standard. Intel's view is that NPUs and AI will be just as necessary in just a few years. When discussing computer hardware in 2025, it is impossible to avoid artificial intelligence. The need for AI, in the cloud and on devices, is greater than ever. Amidst all the skepticism around AI, some small glimmers of an interesting future are emerging. As Intel's VP of Client AI, Hallock's perspective is an optimistic one, especially on the gaming front. "Broad utilization is likely a few years away, but there are interesting use cases for NPC voices, character realism, quest text, world/texture generation, and more. I think these tools will be especially useful for indie developers, as they can get more immersive results with limited time and staffing." Another major arena for AI is security. "At Intel, we often like to talk about 'AI for good.' That's why we work with vendors like Trend Micro, McAfee, Crowdstrike, and Bufferzone to support AI models that improve the security of the PC... Intel has a comprehensive traditional system security stack that operates below, at, and above the OS. We also think offline AI is an important step that enables users to take better control of their privacy and data rather than taking data up to the cloud." A look at what's ahead for Intel's chip roadmap also requires a look in the rearview mirror. Intel launched its first AI PC chip, Meteor Lake, in late 2023, though many systems didn't hit the shelves until 2024. While Meteor Lake offered decent performance and efficiency gains, its competitors left it in the dust in the second half of 2024. Intel's next 2024 mobile release was the Raptor Lake Refresh high-performance CPUs, the 14th and final generation of Intel's "Core i" branding. In the fall of 2024, Intel followed up on AI PC computing with the Lunar Lake Core Ultra 200V series. While this silicon was designed for ultra-thin and light laptops with impressive battery life, Lunar Lake also offered gains in AI and gaming performance. This triumphant laptop launch was followed by a beleaguered launch for Intel's Arrow Lake Core Ultra 200S/K desktop chips. While Intel has identified and patched all five causes for the poor performance and efficiency behind the sub-par launch, it did cause many desktop PC enthusiasts to flock to AMD to upgrade their gaming rigs. Intel has also gotten into the discrete graphics game with the Arc B-series desktop GPUs, which have been well-received, partly due to how budget-friendly Intel's Arc GPUs are compared to pricier Nvidia and AMD graphics cards. Intel's Arrow Lake is looking for redemption on mobile platforms, with the H and HX series of laptop chips launching by the end of March. Arrow Lake will also see U-variant chipsets launch later this year. Additionally, the next generation of Intel silicon, Panther Lake, is already in testing and is expected to launch in the second half of 2025. Intel has the Arrow Lake H chips coming by March for high-performance portable laptops, with the Arrow Lake HX gaming and workstation variants coming shortly after. The Arrow Lake U variant of more power-efficient silicon will be coming later this year. Lastly, Intel has confirmed that the next generation of Intel processors, Panther Lake, is already in testing. We want to see how Intel's new chipsets hold up in our lab tests before we make any claims, but if you've been considering updating to a new Intel-powered AI PC or gaming laptop, you might want to hold off another few months. Of course, waiting also risks getting hit with tariffs on tech imports, which could see laptops and gaming hardware prices spike by up to 40%. However, the White House's tariff tactics are in a state of flux, so this may change. When it comes to advances in performance, power efficiency, and AI optimization, Intel has plenty in the works. Hallock understands the "enthusiast skepticism" of AI and NPUs. "We're still learning how to deal with this, and some people are still waiting for their killer app, right? Not everybody has a killer app for AI yet," he says. No matter which AI feature or app becomes the industry favorite, Intel plans to have processors for it.

Intel next-gen GPUs scrapped, E-Core Xeons delayed

Intel capped off a tumultuous year with a reality check for its product roadmaps. Plans to commercialize the American giant's next-gen GPU architecture, codenamed Falcon Shores, have been scrapped, while its next generation of many-cored CPUs has been delayed until 2026, interim co-CEO Michelle Johnston Holthaus revealed Thursday along with the biz's financial figures for 2024. Falcon Shores has undergone several transformations over the years. It was first envisioned as an XPU that would meld CPU and GPU tiles, and later pared back to a GPU that would combine Intel's Xe graphics lineage with Habana's AI chemistry. Now it seems the chip will never leave Intel's labs. We plan to leverage Falcon shores as an internal test chip only "Many of you heard me temper expectations on Falcon Shores last month," Holthaus told financial analysts on a conference call a few hours ago. "Based on industry feedback, we plan to leverage Falcon shores as an internal test chip only, without bringing it to market. This will support our efforts to develop a system-level solution at rack scale with Jaguar Shores to address the AI data center more broadly." The revelations mark the latest blow to Intel's AI ambitions for the datacenter world. Last quarter, Intel admitted its Gaudi3 accelerators had failed to deliver on the $500 million revenues forecast for 2024. "This is an attractive market for us over time, but I am not happy with where we are today," Holthaus said. "On the one hand, we have a leading position as the host CPU for AI servers, and we continue to see a significant opportunity for CPU-based inference on-prem and at the edge as AI-infused applications proliferate. "On the other hand, we're not yet participating in the cloud based AI data center market in a meaningful way." While Falcon Shores has effectively been canned, Intel's Clearwater Forest Xeons have only been delayed. The parts, slated to be among Intel's first datacenter products on its all-new 18A (1.8nm-class) process nodes, are now expected to arrive in the first half of 2026. According to Holthaus, the rationale boils down to demand for Xeons bristling with E-cores: "What we've seen is that's more of a niche market, and we haven't seen volume materialize there as fast as we expected." The decision to delay Clearwater Forest is less surprising as its original release schedule had it awkwardly close to the release of Intel's 288-core Sierra Forest Xeon 6 processors due out earlier this year. While Clearwater Forest won't make its debut this year, Holthaus insists the 18A process tech is still on track and will ramp alongside the launch of Intel's Panther Lake client CPUs in the second half of the year. "As the first volume customer of Intel 18A, I see the progress that Intel Foundry is making on performance and yield, and I look forward to being in production in the second half, as we demonstrate the benefits of our world class design," Holthaus emphasized. She also revealed that Panther Lake would be followed by a next-gen product called Nova Lake, which would utilize a mix of internal and external fab processes, meaning a reliance on non-Intel factories. Speaking of 18A, it's been nearly two months since chief exec Pat Gelsinger's abrupt "retirement" and the chipmaker has not yet named a worthy successor. "The board remains intensely focused on the search for a permanent CEO," interim co-CEO and CFO David Zinsner said on the conference call. "The search is progressing, but we have nothing new to report," he added, preemptively shutting down questions ahead of a Q&A with Wall Street. Even without a permanent CEO at the helm, Holthaus and Zinsner are pushing ahead with Gelsinger's grand plan to reinvent Intel as a manufacturing heavyweight. The CFO emphasized that building a successful foundry business requires more than competitive process technology; it needs trust from the semiconductor industry, which can take time to build. We're going to systematically attack our costs In other words, don't expect the foundry's financial situation to change overnight, though improvements are on the horizon with the impending ramp of 18A, allegedly. "We're going to systematically attack our costs and remain highly focused on our goal of delivering break even operating income for Intel foundry by the end of 2027 and we expect to demonstrate improvements this year," Zinsner said. Work in support of this goal is still ongoing. According to Intel, tool installation at its Fab 52 site in Arizona is underway to support the ramp of 18A later this year. To support this project, Intel says it collected $1.1 billion of the $7.86 billion in subsidies awarded by the US Department of Commerce late last year, and another $1.1 billion this month. In terms of foundry customers and who on Earth they are exactly, Intel remains fairly tight lipped. It claimed in December it completed a tape out of a 16nm-class design for a customer expected to begin volume production at its Ireland facility later this year. Intel is expected to share more details regarding its manufacturing ramp in late April during its second annual foundry event in San Jose, California. Compared to Intel's disastrous performance over the past few quarters, which were punctuated by multi-billion-dollar losses, missteps, and unmet promises, its final three months of 2024 were comparatively uneventful. Intel is still bleeding cash, recording a $100 million net loss in the fourth quarter, down 105 percent from the year-before's $2.7 billion profit. However, it managed to book revenues on the upper end of its guidance at $14.3 billion, albeit down seven percent year-on-year. So-called inter-segment eliminations also cost the chipmaker $4.3 billion in sales, it noted. Digging a little deeper, Intel's Client Computing Group (CCG) once again did the heavy lifting, accounting for $8 billion of the corporation's revenues for the quarter, a decline of nine percent from the year prior. The Datacenter and AI group fared a little better falling just three percent to $3.4 billion, while Intel's Networking and Edge (NEX) group was the lone bright spot in Intel's product mix with revenues growing 10 percent to $1.6 billion. However, NEX's rebound in edge demand wasn't nearly enough to overcome a six percent year-on-year decline in revenue from Intel products division in Q4. And while Zinsner remains confident in Intel's foundry fortunes, that division continues to struggle with revenues down 13 percent year-on-year to $4.5 billion and operating losses for the quarter totaling $2.26 billion, nearly twice that of Q4 2023. Despite a challenging 2024, Intel's full-year revenues were almost flat at $53.1 billion, declining two percent compared to 2023. The same can't, however, be said of profits. The past 12 months saw Intel post $18.8 billion in losses versus a tidy $1.7 billion profit the year before. Gross margins dipped to 32.7 percent from the year-ago's 40 percent. Looking ahead to Q1 2025, Intel is targeting revenues of $11.7 to $12.7 billion, with Zinsner citing regular seasonality - Q1 is slower than Q4 for sales - for the weak outlook. ®

Intel's stock inches up on solid earnings and revenue beat - SiliconANGLE

Shares of the troubled chipmaker Intel Corp. rose more than 3% after-hours on the back of solid fourth quarter results that topped expectations, overshadowing somewhat disappointing guidance. The company reported earnings before certain costs such as stock compensation of 13 cents per share, squeezing past Wall Street's consensus estimate of 12 cents per share. Revenue for the quarter came to $14.26 billion, up 7% from a year ago and ahead of the Street's target of $13.81 billion. All told, the company delivered a net loss of $126 million in the quarter, down from a profit of $2.67 billion in the same period one year ago. Today's report is the first since the chipmaker's board of directors successfully ousted former Chief Executive Officer Pat Gelsinger, who had struggled for years to revive the company's fortunes. He presided over an incredibly rough period, during which Intel not only missed the artificial intelligence boat, but also lost share in key markets such as personal computer and server chips. At the same time, the company has frittered away billions of dollars in building new chip manufacturing plants, with little to show for those investments. Following Gelsinger's somewhat surprising departure, Intel appointed its finance chief David Zinsner and products manager Michelle Holthaus as interim co-CEOs. Holthaus said the fourth quarter was a "positive step forward" for the company, as it delivered revenue, gross margin and earnings all above guidance. "Our renewed focus on strengthening and simplifying our product portfolio, combined with continued progress on our process roadmap, is positioning us to better serve the needs of our customers," she said. "Dave and I are taking actions to enhance our competitive position and create shareholder value." In the meantime, the company is continuing its search for a permanent CEO to succeed Gelsinger, but Zinsner said on a call with analysts there is nothing to report so far During the call, Holthaus responded to a number of questions from analysts regarding its product roadmap. Somewhat disappointingly, she said the company's Falcon Shores AI processor will only be used in servers as a test chip. Based on industry feedback, the company has no plans to launch the product for sale, she said. In 2023, Intel had pitched Falcon Shores as a potential alternative to Nvidia Corp.'s graphics processing units, which power the vast majority of AI workloads today. The chip was announced shortly after Intel stopped development of its Rialto Bridge GPUs for servers. Going forward, Intel will be pinning its AI hopes on a new product called Jaguar Shores, which is designed for a broad range of AI data center workloads, Holthaus said. Meanwhile, the company expects to achieve volume chip production for its most advanced 18A process technology by the second half of the calendar year, when it will launch its first central processing units based on that tech, code-named Panther Lake. With respect to guidance, Intel said it's expecting a breakeven profit in the first quarter, with revenue coming between $11.7 billion and $12.7 billion. Analysts had forecast a profit of 9 cents per share on sales of $12.87 billion. Zinsner told analysts the guidance reflects "seasonal weakness" that's magnified by "macro uncertainties" such as inventory digestion and competitive dynamics. He added that the prospect of tariffs also adds to the uncertainty. Breaking down the latest results, Intel's Client Computing group, which sells PC chips, generated $8.02 billion in sales, down 9% from a year ago but ahead of the Street's estimate of $7.84 billion. "While difficult to quantify, we suspect a portion of Q4 revenue upside was due to customers hedging against potential tariffs," Zinsner said. As for the Data Center and AI segment, which makes chips for cloud-based servers, revenue came to $3.39 billion, down 3% from a year ago and in-line with the Street's estimate. The Network and Edge unit added another $1.62 billion in sales, up 10% from a year ago and above the $1.5 billion consensus estimate. Mobileye Global Inc., the Intel-owned but publicly-traded manufacturer of chips for advanced driver assistance systems and autonomous vehicle technologies reported earnings separately this morning. It beat expectations, posting a profit of 13 cents per share versus the consensus estimate of 11 cents, with revenue topping $490 million, ahead of the $477.8 million analyst target. However, Mobileye's stock was down slightly in the extended trading session after it could only offer weak guidance for the upcoming year. It's calling for fiscal 2025 revenue of between $1.69 billion and $1.81 billion, some way off the Street's estimate of $1.94 billion. Amid the ongoing hunt for a new CEO, there has been a lot of speculation about what might happen to the various parts of Intel's business, with many analysts expecting the company to shed its burdensome foundry business, which continues to rack up losses. Last month, Intel said it's also planning to spin off its venture capital arm, Intel Capital, as a separate business. Intel is also trying to sell at least a minority stake in its Altera unit, which manufactures field-programmable gate arrays that can be reprogrammed to suit different computing tasks. The company shelled out $14.5 billion to acquire Altera in 2015. In an update, Zinsner said the company is "far along on the process of Altera". He added that he expects to have more to say by the time Intel delivers its next financial results in three months time. "That will help generate some cash that we can use to deliver," he promised. In the wake of Gelsinger's dismissal, there was speculation that Intel may even be acquired outright by one of its larger competitors in the chip business, with names like Qualcomm Inc. and Broadcom Inc. mentioned as possible buyers. However, Broadcom CEO Hock Tan said last month he has "no interest" in buying the company, and it's also believed that Qualcomm's interest has cooled.