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Intel CEO expects the company to lose more Market Share by 2023

At yesterday’s Evercore ISI TMT conference, Intel CEO Pat Gelsinger stated that the company anticipates that market share losses in data centres would persist through at least 2023 and only start to reverse in 2025 and 2026. Gelsinger added that as the company continues to concentrate on its core skills, it would probably exit other businesses in a manner similar to how it recently started exiting Optane memory.

Intel recently postponed the release of its Sapphire Rapids chips once more; the chips are now expected in 2023. Although the new chips are “better than the AMD equivalents” in terms of power and performance and will triumph in some benchmarks, Gelsinger observed that the benefits aren’t significant enough to stop AMD’s progress. As a result, Intel will continue to lose market share because its data centre business won’t expand at the same rate as the whole market.

“We do expect that overall our data center business grows every year as we go forward. From where we are, as we said, Q2, Q3 [is] the bottom. But we believe that we’re still losing share at least through next year,” Gelsinger said.

Intel
credit: tomshardware

“Competition just has too much momentum, and we haven’t executed well enough. So we expect that bottoming. The business will be growing, but we do expect that there continues to be some share losses. We’re not keeping up with the overall TAM growth until we get later into ’25 and ’26 when we start regaining share, material share gains,” Gelsinger added. Notably, the statement isn’t definitive about the company’s performance in 2024 — Gelsinger specifically stated that the company wouldn’t begin regaining market share until 2025.

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“Now, obviously, in 2024, we think we’re competitive. 2025, we think we’re back to unquestioned leadership with our transistors and process technology,” Gelsinger said. 

In the data centre market, AMD has now surpassed Intel for 13 consecutive quarters, capturing 20.2% of the market.

Gelsinger’s views suggest that share losses will continue for at least five more quarters, and maybe longer. The company’s Sierra Forest processors, according to Gelsinger, are a crucial breakthrough that will help it compete with the other chip architecture, Arm, which is steadily stealing market share. The Sierra Forest Xeon processors will have more cores since they contain efficiency cores that are optimised for maximum power economy and performance density.

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Nivedita Bangari
Nivedita Bangari
I am a software engineer by profession and technology is my love, learning and playing with new technologies is my passion.
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