Interesting claim given how quickly their server share has slid, but…
Analysts attribute the loss of share to how competitors outpaced Intel on chip performance because of a series of manufacturing stumbles. While Intel, which makes its own chips, was stuck figuring out manufacturing challenges, AMD, whose chips are manufactured abroad by TSMC, progressed to better performing generations, Danely said. However, Intel is on track to catch up next year, he added.
Meanwhile, corporations are still buying from Intel, which continues to dominate market share for non-AI computing workloads on servers. Second-quarter sales fell 1% from the same period a year earlier.
Intel has an advantage over rivals because it owns its chip fabrication plants, Narendra said. “They have a chance to recover some ground,” he added, “but that’s going to take some years.”
‘The same old’
Enterprise software provider Zapata AI said it buys laptops and servers with Intel chips. Chief Executive Christopher Savoie said he hasn’t seen enough of a difference between Intel’s offerings and those of rivals to warrant switching.
Savoie said most enterprise and consumer purchasers aren’t concerned about the exact performance level of the chip in the device they’re buying, because generation-to-generation improvements don’t always result in a noticeable difference. Cost is usually the bigger factor, he said.
Danely said that despite Intel’s chips being outpaced from a performance perspective, they still have strong security and stability, making them appealing for the enterprise. Plus, changing suppliers isn’t always an easy or cheap option.
It’s difficult to change out Intel as a supplier, according to Suvajit Basu, CIO of Jersey City, N.J.-based Goya Foods, which uses PCs with Intel chips for its primary desktops and laptops.
Citi’s Danely said, that “On the enterprise side, there’s almost this inertia there. There’s this sort of fear of switching over to AMD because Intel was so successful for four or five decades. That business moves very slowly.”
PC sales are a bright spot for Intel. They are getting a boost from a new crop of devices advertised as AI-ready. Revenue in the division housing PC chips rose 9% in the latest quarter from the same period a year earlier to $7.4 billion.
It remains to be seen whether Intel’s relative stability in some of its core markets will be enough to save a company that missed wave after wave of technology innovations, from the growth of mobile devices to processor advancements and, now, the AI boom.
Basu said he hasn’t seen any big innovations or advancements from Intel as the company “has become the same old.”
Yet Intel’s brand is still recognizable and trusted, so for both consumer and enterprise PCs and the server business, at least in the short term, Danely said, “Intel still works.”