Intel, in its Q3 2024 financial result, indicated that its business units are still struggling to turnaround despite focusing on AI business.
Revenue of Intel in the third-quarter fell 6 percent to $13.3 billion.
Intel’s
Client Computing Group (CCG): $7.3 billion, down 7 percent from Q3 2023.
Data Center and AI (DCAI): $3.3 billion, up 9 percent.
Network and Edge (NEX): $1.5 billion, up 4 percent.
Total Intel Products revenue: $12.2 billion, a decrease of 2 percent.
Intel Foundry:
Intel Foundry revenue: $4.4 billion, down 8 percent.
All other categories:
Altera: $412 million, down 44 percent.
Mobileye: $485 million, down 8 percent.
Other: $142 million, down 24 percent.
Total all other revenue: $1.039 billion, down 28 percent.
Intel is forecasting fourth-quarter 2024 revenue of $13.3 billion to $14.3 billion as it expressed optimism about the future of its PC and server businesses.
For the data center segment, which includes AI chips, Intel said revenue rose 9 percent to $3.3 billion.
Intel largely missed out on a boom in investments in advanced AI chips for data centers as businesses are focusing on adopting generative AI technology – a market dominated by Nvidia, followed by rival AMD.
The market for chips for AI in the cloud and the data center will reach $151bn in 2029 as compared with $78 billion in 2024 $10 billion in 2022, Omdia’s Principal Analyst for Advanced Computing, Alexander Harrowell said.
Intel said more than 70 percent of GPU-accelerated servers are already using Intel Xeon as the host CPU. Intel’s Gaudi 3 AI accelerator delivers twice the networking bandwidth and 1.5x the memory bandwidth of its predecessor for large language model efficiency.
Revenue in Intel’s Client Computing Group – which includes its PC chips for desktop and laptop computers – fell 7 percent to $7.3 billion. Intel, as one of the largest makers of PC chips, has benefited as the rollout of on-device AI features and a fresh Windows update cycle renewed demand for PCs.
Intel said it’s on track to ship more than 100 million AI PCs accumulative by the end of 2025. 100 ISVs (independent software vendors), 300 applications and 500 AI models powered by Core Ultra 200V series processors.
The size of the AI PC market will be $231.30 billion by 2030 from $50.61 billion in 2024, with a compound annual growth rate (CAGR) of 28.82 percent, Tom Mainelli, group vice president, Devices and Consumer Research at IDC, said.
AMD is challenging Intel’s share in the PC and server CPU market. AMD is also the closest competitor to market leader Nvidia in AI graphics processors.
Intel is planning $12 billion to $14 billion in capital spending in 2025.
Intel CEO Pat Gelsinger said that high volume production of its advanced 18A node will begin in the second half of 2025, and that most of the products manufactured on it will be made by Intel.
Intel reported a third-quarter net loss of $16.6 billion. That compared with a net profit of about $300 million in the year-earlier period.
IBM will be deploying Gaudi 3 as a service on IBM cloud. But Intel said the uptake of Gaudi is slow as adoption rates were impacted by the product transition from Gaudi 2 to Gaudi 3 and software ease-of-use. As a result, Intel will not achieve its target of $500 million in revenue for Gaudi in 2024.
Baburajan Kizhakedath
