Intel's Struggle in 2024: AMD Gains More in 14-Year Low

Intel's server business is fighting some tough battles in the market. According to the latest analysis, server CPU sales have dropped significantly - not just this year, but for the last three years straight. The last time these numbers were this low for Intel was 14 years ago. The data center business, which once held some of the highest shares of the market, is currently showing its lowest sales volume of Intel’s CPUs since 2010. Analysts find an unexpected climb at one point, back in 2021. But the sales volume of CPUs decreased rapidly in the following years. The sharpest decrease happened in 2023, when Intel saw a significant drop of more than 50% compared to the earlier peak in 2011. This trend appears to be on route to continue into 2024, currently sitting below 50% of its 2020 high. The server chips market is witnessing a stiff competition from AMD. Initially, AMD’s strategy was to capitalize on Intel's decline, but in the gaming desktops arena, Intel failed to respond to AMD's 3D V-Cache technology. Hence, AMD became the predominant brand in the gaming processors space. The clear evidence can be seen in the market share. Team Red is steadily making a mark in the space previously dominated by Intel. For the data center processors, Intel is planning to launch Clearwater Forest CPUs in the market. These will include the same technology which AMD had put as the flagship component in Ryzen chips. This push for technology updates reflects Intel’s focus on servers as a high-stakes market. Intel believes the servers are of the utmost importance and are taking significant steps to ensure upgradation in these segments.

The 2024 financial year is witnessing the launch of many significant Intel processors. Clearwater Forest and Panther Lake are expected to be among these. These will be some of the first processors based on the new 18A manufacturing process that Intel has under development. All this has pushed Intel to seek external manufacturing help. This is the first time that the company has outsourced their production to a third party, specifically for semiconductor chips. Last year already saw Intel producing L3 Intel laptop CPUs through the TSMC firm. The trust factor is also increasing over the other process. Intel is also planning to outsourcing the future semiconductor production to another manufacturer, potentially TSMC. Other big shifts have happened in the company's structure. Intel has split up its foundry division into a different company. The CEO of Intel, Pat Gelsinger, recently left the company due to the large downsizing and restructuring that Intel is going through. Bill Gates, co-founder of Microsoft, commented publicly on Intel's downward trajectory. He asserted that Intel has faced some significant setbacks over the past few years and has fallen behind in the chip design and manufacturing sectors. Rumors are circling about a potential company buyout, but no concrete offers have emerged yet. What might this mean for businesses relying on Intel processors? The outcome remains uncertain. The market is constantly evolving, so it is impossible to know where the picture will end up. One thing is guaranteed. Intel is running out of time to fix its foundry manufacturing to compete with AMD and the rest of the industry.

Actions