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
We see the same happening now at Intel. Compute based tiles or whatever the F they are doing, the ones not meeting the computational quality standards are being resold as Arc's. Its just one line served for 2.
The downside of putting computational cards into graphics consumer cards is that, often the power is higher, the performance comes with quite some overhead and its behind the competition.
AMD used todo that (Vega > Instinct) but they are actually making graphics vs computational based cards, RDNA / CDNA. The difference is pretty big if i can say.
Any tech and IP they develop will be used in their IGPs, and they could end up in the mobile and console worlds too.
Nothing stops them from being the PS6 hardware, if they sort the kinks out
And on the opposite, GPU business is what had saved AMD. (the semi-custom business with major console manufacturers, for instance)
I still cannot wrap my hand about amazing comeback. I get the perfect storm of new design from AMD coming in parallel with Intel's new fab node underdelivering, but... heck, what a little miracle had happened.I think it is more nuanced than that and it is not necessarily caused by not understanding what is going on.
There are people who own stock who could not give a flying... fruit about elusive long term prospect. They've bought stock here and now and need Intel to deliver here and now.
CEOs, on the other hand, cannot be sure they will even last for long enough for good strategic decisions to pay off.
So at the end of the day we have situation when key stakeholders are only interested in short term, at best, mid term results.
Best thing about hitting rock bottom is they can only go up from here right or can it get worse :eek: