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
'dun like Raja.
All that said:
Give them a friggin chance; jeeze.
Intel only 'gave up' on Optane after several years and product lines 'not panning out'.
AFAIK, there is no Intel Alchemist release in the 'States at all, yet. If they hang back out of our market for the first gen, okay. Let's see how Gen 2 goes.
It's like looking at a new factory with 10 billion in investment and dicidin day 1 that it's not profitable. But any HW investment isn't profitable day 1 (or 2 month in this case), it takes time, be patient (or don't, and keep wabble about how much intel sucks- all is good).
They don't have a cash problem so I see no point in ending something that haven't really started yet.
Wait a few months and see the driver progress.
I would say buying ATI saved them.
tbf, i do not even dislike Raja and i want Intel to succeed (finally) at discreet graphic ... but for now ... i am heavily underwhelmed :ohwell:
You cant take credit for fixing an issue when you've directly caused this very issue.
/ontopic
It was predicted that intel would take a huge loss before a respectable competiticve card was brought to market. I thought that number would be in billions, may even double digits. That depends on how persistent Intel want to be and how much abuse Intel will take from shareholders before giving up. This is just the first instance of some entity suggesting Intel jump off a long pier into a deep lake.
;)
And next, consider how your post adds anything to it.
As for the GPU's, the first generation R series (R9 290X, 290, 280X etc) was a great series. They really struggled after that and made poor investment choices in HBM early which was expensive and made it hard to put more than 4gb HBM on the first generation making them inferior in many aspects to Nvidia's offerings. It took years but they are finally competitive again on the GPU front.
Honestly, Intel needs to double down and invest in their GPU's. Not just for consumers to have alternate options, but because they are going to need some alternative revenue streams. Not to mention at this point cutting it off would be a waste and not only damage their reputation, but have them write off a huge amount of money.
Fan-tas-tic. Against all odds indeed - now, that's my point as well. Apparently he knows how to present significant risk as a good story, and that results in overpromise/underdeliver. And part of that reality is: he can't deliver. I never said the guy is dumb. He's just not good at planning and timing/reading the market. His biggest problem is all the PR preceding a release, really. Both Vega and Arc could have been small hits in specific segments, but no, it has to be the top GPU for everyone. This also echoes in design choices, in both cases, and in the amount of stuff that should be in there. If you look at the feature list for Arc, and GamersNexus coverage on it, it speaks volumes of that. And the poor delivery then really just proves the whole point. This was also the case with Vega - the majority could tweak the card better themselves, that's something in an age where GPUs boost fully automatically at competitors.
Every time the results are unrefined, hardware focused, blunt instruments. But GPU has been at a level where high levels of efficiency and refinement are key for a while now. We're only just now entering another era, seemingly, of more blunt instruments, scaling performance by adding power and die size - where two players have already had their refinement done or underway - and Intel is merely beginning at both.
Moreover Intel already spent the $3.5 billion; selling or killing Arc won't change that. Today Intel has Arc, at least in a lab somewhere. The question is: can Intel get a return on the dollars they invest after today?
Thing is, usually when you bring a new tech into your product portfolio and you invest big on it, you have a long term plan of capturing markets with it and it has a decent chance of success - something calculated along numerous factors that are predictable. But if Intel can't take a meaningful bite of market share, what's the point? Is the market even big enough for them to recoup that money by the time they get to it?
And that comes down to the question: Can Intel catch up with the current start they've got? It means they'll have to run faster than two competitors that are in the race for decades and very good at it. This is not a disruptive sort of technology like ARM. This is 'another GPU on x86'. It is forced to play by the very same rules as everyone else making those products.
About Xe, yes its in every CPU, but they already had that before Xe. So they'll rebrand it back to Intel Iris or whatever.
I don't honestly see a single piece of Arc or Xe that is somehow unique, a design win or redefining the market in any way, and that's really the biggest problem. There isn't one reason you should really have that Intel GPU.
I love all the people that fail to understand a product launch of this scale takes time, money and effort. The Core Duo line of CPU's were amazing but they didn't take the world by storm. It was a process that took over 3 years before launch and even then it took over 6 months to build up. Ryzen was no different, neither was the RTX line of GPU's. It ALWAYS goes this way.
:DYes they will and they wont sell popcorn for the fireworks that may be upcomming.I dont think anyone claimed Raj was any good at management, IIRC he was more of a do'er than a leader.Every new product introduction had/has its share of naysayers and schills, there is no getting around the fact that people just need to wait to see if something is accepted after it was proven worthy of opening the wallet.
They have the capital to do all those experiment and if you are in favor of tech advencment there is no acutel reason no to support them (not by buying stuff you dont need, just by word) for trying even if they fail.