In recent years the Intel have gotten rid of divisions that do not achieve the expected profit, such as the Optane SSD division, 5G modems and even drones.
Since Pat Gelsiger’s return to the company as CEO, 6 divisions have been liquidated, generating savings of US$1.5 billion. According to an analysis by the famous consulting firm Jon Peddie Research (JPR)the Santa Clara giant should do the same with its GPU division, which encompasses several segments, including the end consumer, with the recently launched Intel Arc.
The analysis shows that Intel invested around $3.5 billion in its GPU divisiona Accelerated Computing Systems and Graphics Group (AXG)which has been drawing since 2016, but is only racking up significant losses.
The most viable alternative, according to JPR’s analysis, is to drop out of this market. “If they don’t, the company will face years of losses as it tries to fight its way through a hostile and unforgiving market.”, highlights JPR. sOnly in the first fiscal quarter of 2021, Intel’s GPU division had loss of US$ 2.1 billion.
If Intel jumps out of the graphics card segment, it will be the processor giant’s second failed attempt in this market. It is worth remembering that the first time Intel launched a dedicated graphics card was in 1998, with the i740. Some other models followed, but Intel left it aside, and started to develop a solution that proved to be a great success in the company’s history, the iGPU, the graphics chip integrated into the processor.
The GPU market is very broad, and, without a doubt, a slice that interests Intel a lot is gaming, however, the difficulty of facing this range is highlighted by all analysts. It is a market with a well-designed and marked division for many years, the double NVIDIA and OMG. According to data from Statista, NVIDIA accounts for 78% of the market, followed by AMD with 17%.
In addition to fully established brands, especially in the gaming segment, Intel rows against two companies with an increasingly assertive development in optimized drivers, a characteristic that Intel will take a while to get on track. Intel’s GPU division could get interesting in the future, but can the company hold its own until then? Market analyzes show that there is no
So far, the probability that Intel will abandon further investment in the development of its AXG division and close/sell the division is 50%, believes John Peddy of JPG. Some of Intel’s moves in its AXG division make the prospects clear. The company’s Xe-HP architecture development project for data centers was canceled. In addition, the delivery of Ponte Vecchio graphics processors for artificial intelligence and HPC was also repeatedly delayed.
If the schedule does not change, still in 2022 we should see new Intel Arc graphics cards. The lines Arc 500which includes the intermediate segment, and Arc 700, high performance. The first graphics card of Intel’s revival in the industry, the Arc A380input model, entered pre-sale in Brazil recently. The price is as off-putting as the di