Intel Switches Out For Data Centre Success In Waning PC Market

Intel’s buoyant data centre business has saved the firm from otherwise disappointing quarterly results this week, as the chipmaker reports a 10 percent year-over-year hike in data centre group revenue to $3.9 billion (£2.5bn).

Intel’s Internet of Things division also managed to lasso success with revenue of $559 million (£358m), up four percent year-over-year.

“Second-quarter results demonstrate the transformation of our business as growth in data centre, memory and IoT accounted for more than 70 percent of our operating profit,” said Intel CEO Brian Krzanich.

13.5 percent fall

But revenue from Intel’s PC division fell 13.5 percent to $7.64 billion (£4.9bn) in this second quarter, which ended on June 27.

Krzanich said that the firm is now in a “challenging” PC market, but is hopeful of a pickup in PC demand towards the end of 2015 with the release of Windows 10.

“We continue to be confident in our growth strategy and are focused on innovation and execution. We expect the launches of Skylake, Microsoft’s Windows* 10 and new OEM systems will bring excitement to client computing in the second half of 2015,” said Krzanich.

In June, Intel bought chip-making rival Altera for £11 billion. The acquisition boosted Intel’s capabilities in making higher-end higher-margin chips designed for data centres.

“With this acquisition, we will harness the power of Moore’s Law to make the next generation of solutions not just better, but able to do more. Whether to enable new growth in the network, large cloud data centres or IoT segments,” remarked Krzanich at the time.

10-nanometre chip delay

However, it also came out this week that the release of Intel’s 10nm “Cannonlake” chips has been pushed back to the second half of 2017, instead of the originally planned 2015 release, announced back at Intel’s 2013 developer’s forum.

This autumn Intel is set to release its 14nm “Skylake” chips, but as reported by The Register, Intel now has had to rush in a release of another 14nm chip called “Kaby Lake” in 2016 to fill in the gap left by the 10nm “Cannonlake” no-show.

During the conference call with analysts this week discussing Intel’s financial results, Krzanich said that the firm is having difficulty with getting its chips down to 10nm, and that’s the reason for the delay. For Intel, this is a setback in maintaining its lead against processor rivals, and throws customers’ future data centre deployment plans out of sync with Intel’s usual tick-tock releases of new chip types.

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