Thursday, August 11th 2022
Intel GPU Business in a $3.5 Billion Hole, Jon Peddie Recommends Sell or Kill
Jon Peddie Research (JPR) provides some of the most authoritative and informative market-research into the PC graphics hardware industry. The firm just published a scathing editorial on the future of Intel AXG (Accelerated Computing Systems and Graphics), the business tasked with development of competitive discrete GPU and HPC compute accelerators for Intel. Founded to much fanfare in 2016 and led by Raja Koduri since 2016; AXG has been in the news for the development of the Xe graphics and compute architecture, particularly with the Xe-HP "Ponte Vecchio" HPC accelerator; and the Arc brand of consumer discrete graphics solutions. JPR reports that Intel has invested several billions of Dollars into AXG, to little avail, with none of its product lines bringing in notable revenues for the company. Xe-LP based iGPUs do not count as they're integrated with client processors, and their revenues are clubbed with CCG (Client Computing Group).
Intel started reporting revenues from the AXG business since Q1-2021, around which time it started selling its first discrete GPUs as the Intel DG1 Xe MAX, based on the same Xe-LP architecture powering its iGPUs. The company's Xe-HPG architecture, designed for high-performance gaming, was marketed as its first definitive answer to NVIDIA GeForce and AMD Radeon. Since Q1-2021, Intel has lost $2.1 billion to AXG, with not much to show for. The JPR article suggests that Intel missed the bus both with its time-to-market and scale.
A sizable launch of Arc "Alchemist" in 2021 or early-2022, in the thick of the GPU supply crisis, would have enabled Intel to cash in on sales to whoever is in the market for a graphics card. With the supply crisis over in the wake of the crypto-currency mining demand for dGPUs, Intel finds Arc "Alchemist" competing with GeForce and Radeon products purely on gaming performance, where its fastest "Alchemist" product matches their mid-range products. Both NVIDIA and AMD are ready to ship their next-generation, which is bound to widen the performance gap with Intel even further. Besides graphics, NVIDIA and AMD are ready with even their next-generation scalar compute products, with NVIDIA's Hopper, and AMD's CDNA3, increasing the performance gap with "Ponte Vecchio."
With the recent axing of the Optane Memory business, which rode on the promise of the pioneering 3D XPoint memory technology that Intel invented, it's open-season on non-performing Intel businesses, especially with CEO Pat Gelsinger seeing favorable outcomes in Washington DC for legislation that makes business favorable for Intel and increases government subsidies for the company. JPR recommends that in light of the losses faced by AXG, Intel should consider selling the entire division off and exiting this market.
The JPR editorial can be read from the source link below.
Source:
Jon Peddie Research
Intel started reporting revenues from the AXG business since Q1-2021, around which time it started selling its first discrete GPUs as the Intel DG1 Xe MAX, based on the same Xe-LP architecture powering its iGPUs. The company's Xe-HPG architecture, designed for high-performance gaming, was marketed as its first definitive answer to NVIDIA GeForce and AMD Radeon. Since Q1-2021, Intel has lost $2.1 billion to AXG, with not much to show for. The JPR article suggests that Intel missed the bus both with its time-to-market and scale.
With the recent axing of the Optane Memory business, which rode on the promise of the pioneering 3D XPoint memory technology that Intel invented, it's open-season on non-performing Intel businesses, especially with CEO Pat Gelsinger seeing favorable outcomes in Washington DC for legislation that makes business favorable for Intel and increases government subsidies for the company. JPR recommends that in light of the losses faced by AXG, Intel should consider selling the entire division off and exiting this market.
The JPR editorial can be read from the source link below.
112 Comments on Intel GPU Business in a $3.5 Billion Hole, Jon Peddie Recommends Sell or Kill
But from raw performance the cards don't seem that bad, for a first try the silicon shows an immense progress. AMD had decades of this and couldn't do better against Nvidia then the RX480 at one point. This is money lost if they fell they can't make any progress, it's money invested if they fell they can improve.
But there is clearly a leadership problem making things worst, this launch was absolutely ridiculous at all levels.
RD is always big bucks and time consuming but can pay huge dividends in the end.
Just ask TSMC. ;)
I honestly feel Intel is too big for itself and internally people cant get stuff done or know who to talk to to get things done.
Big picture is high performance parallel computing is a big deal and Intel will enter the market. Product pricing can be adjusted to remain competitive.
First gen can be rocky, but Intel has the design chop to solve these problems, even the mediocre DX11 driver issues.
It's coming.
Natural selection at work.
I'm quite bullish on the big capex fab spend to service non-intel products. I'm glad Intel is moving on from xpoint. I see a bright future for Intel.
Maybe I’m just that financially tone deaf but fucking lol.
Intel is expecting to deliver the first batch of hardware to the Argonne National Laboratory by the end of 2021, but this will come with $300m write-off on Intel’s Q4 2021 financials. Intel is expecting to deliver the rest of the machine through 2022.
Also, Jon Peddie is not seeing the long-term big-picture plan Intel has. His advice needs to be ignored.
Any company jumping into a new market is going to experience large costs before the return begins paying in. This is the reality of any business venture. 3.5B is big money to many, but not to Intel. Jon Peddie's statement seems more like needless fearmongering than that of wisdom.Exactly!Nope, you're on the money, pun intended.
This engineer has no business at executive level jobs.
Overpromise and underdeliver is not where you want to be at this level. Its where you absolutely should not be. That is the reason for 'Poor Vega' and now/soon Poor Arc.
…
Let’s see. I think they’re pretty committed at this point.
And now here we have Intel, who havent been making strides in GPU despite previous attempts and is notorious for tunnel vision company culture; late to market and timing just after decades of economic optimism that has recently turned stale.
Intel might need to just fight for survival of its CPU business soon. They still have no answer to enterprise EPYC and their answer to all markets underneath is yet another monolithic giant with horrible TDP. Big little is not an escape, just postponing eventual total takeover. They either shrink/cut and connect or they die. 'Death' being a slow repeat of AMDs history. Sell fab, etc.
Only reason to cancel this would have been to if they actually believed that they will just blow these GPU companies out of the water, companies that been the cutting edge for decades and that's just delusional.
So they are bad in DX11 which means old games that gonna run well anyways so it doesn't really matter and their DX12 has solid performance.
They also claim that they'll price it based on DX11 performance so we might be able to get same performance for less if we accept that there will be bugs to deal with.
Another thing that I think it's positive is that the number of transistors of ARC 770 is around 6800 non-XT and I think that's where they'll land with performance in DX12 and if that's true they are actually on par and it's not like they are using twice the silicon to match it's performance as that way they'll never be a success.
And lastly the driver thing well that just takes time it's plain physics there is no way around it. So they can only better with time.