Intel shows recovery in PCs but faces competition in AI, data centres

Intel shows recovery in PCs but faces competition in AI, data centres

Intel’s traditional PC dominance looked to be approaching its former rude health, but that good news in its earnings report was offset by ongoing weakness in servers.

Credit: Magdalena Petrova

A faster-than-expected recovery in sales of PC chips helped Intel post third-quarter revenue that exceeded expectations. 

Still, weakness in its data centre business is a sign of vulnerability in a market where users are looking for processors that can handle AI workloads that are predicted to grow as enterprises adopt generative AI.

Overall revenue dropped 8 per cent year over year to $14.2 billion, but that exceeded the consensus expectations of analysts, who had forecast revenue of $13.6 billion.  Intel’s endpoint division, which makes chips mostly for PCs, took in $7.9 billion in revenue for the quarter, just a slight dip from the $8.1 billion in the previous year’s third quarter.

Net income dropped by 71 per cent year over year to $310 million, due to the lower revenue and costs related to building out manufacturing capabilities.

"Continuing its investment in manufacturing capacity to create a geographically balanced, secure and resilient supply chain, Intel opened Fab 34 in Leixlip, Ireland, during the quarter," Intel noted in its earnings news release Thursday. "Combined with the company’s planned wafer fabrication facility in Magdeburg, Germany, and planned assembly and test facility in Wrocław, Poland, this will help create a first-of-its-kind, end-to-end leading-edge semiconductor manufacturing value chain in Europe."

Meanwhile, the company’s data centre and AI division, which makes CPUs for servers, saw revenue sink 10% from $4.3 billion in the third quarter of 2022 to $3.8 billion this year.

One of Intel’s newer rivals in this data centre market is Nvidia. Thanks to demand for its GPU products, the go-to processors for AI workloads, Nvidia is becoming a strong competitor in data centres.

“Overall, we definitely feel those competitive pressures,” CEO Pat Gelsinger said on the company’s earnings call.

For the moment, however, Intel’s position in the PC market remains strong, with the latest results indicating that the company has successfully weathered a sharp downturn in late 2022 and early this year. That drop in CPU sales has generally been attributed to the end of historically strong demand prompted by the quarantine periods of the pandemic — laptops, in particular, saw increased sales due to the massive shift towards remote work. Supply chain disruptions due to the pandemic also affected the PC market.

However, Intel may also face increasing competition in PCs. Nvidia, in addition to being the major competitor for AI workloads, is one of the companies targeting Intel’s historical dominance in the PC CPU marketplace. Nvidia reportedly plans to use designs from Arm to create Windows PC chips. Other rivals, like Qualcomm and AMD, are preparing to target the PC market as well with Arm-based CPUs as well. 

Follow Us

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.


EDGE 2024

Register your interest now for EDGE 2024!



How MSPs can capitalise on integrating AI into existing services

How MSPs can capitalise on integrating AI into existing services

​Given the pace of change, scale of digitalisation and evolution of generative AI, partners must get ahead of the trends to capture the best use of innovative AI solutions to develop new service opportunities. For MSPs, integrating AI capabilities into existing service portfolios can unlock enhancements in key areas including managed hosting, cloud computing and data centre management. This exclusive Reseller News roundtable in association with rhipe, a Crayon company and VMware, focused on how partners can integrate generative AI solutions into existing service offerings and unlocking new revenue streams.

How MSPs can capitalise on integrating AI into existing services
Access4 holds inaugural A/NZ Annual Conference

Access4 holds inaugural A/NZ Annual Conference

​Access4 held its inaugural Annual Conference in Port Douglass, Queensland, for Australia and New Zealand from 9-11 October, hosting partners from across the region with presentations on Access4 product updates, its 2023 Partner of the Year awards and more.

Access4 holds inaugural A/NZ Annual Conference
Show Comments