Intel Delays New Chip in First Setback for CEO Gelsinger’s Turnaround Effort
Server-chip delay comes as rival AMD has taken market share
By Asa Fitch
Updated June 29, 2021 4:28 pm ET
Chip maker Intel Corp. INTC -1.27% is delaying production of one of its newest chips to improve performance, the first significant product setback under new Chief Executive Pat Gelsinger as he seeks to rebuild the company’s competitiveness.
Intel now is planning to start producing the next generation of central processing units for servers—the brains of those machines—in early 2022 after previously saying it would be ready late this year, Lisa Spelman, the company’s corporate vice president, who manages the server-chip business, said in a Tuesday blog post.
The additional time, Ms. Spelman wrote, would allow Intel to improve the chips’ performance, in particular around the highly prized metrics of data handling and artificial-intelligence processing. Production is now set to begin in next year’s first quarter and ramp up in the second quarter, she wrote.
The delay of the new chips is the first under Mr. Gelsinger, who became chief executive in February following major delays in chip-making advances under his predecessor, Bob Swan. Intel almost a year ago said the following generation of even more advanced chips with super-small transistors wouldn’t be ready until late next year, about a year later than initially expected.
Mr. Gelsinger has vowed to make Intel more reliable in producing new chips. At his first shareholder meeting as the company’s CEO in May, he said Intel was aiming to deliver a “steady cadence of leadership products that our customers can depend upon.”
The server-chip market is one of the largest, fastest-growing and most competitive in chip-making. Intel generated $5.6 billion in revenue from its data-center business in the first quarter, roughly a quarter of all sales....
Intel has long dominated the data-center chips business, but perennial smaller rival Advanced Micro Devices Inc. has released chips in recent years that meet or exceed Intel’s in performance metrics, helping it gain market share. AMD’s market share has grown to 8.9% in the first quarter of 2021 from 1.8% in 2018, according to Mercury Research. Intel is still the largest vendor in that segment, with a 91.1% share of the market, according to the data.
Nvidia Corp. NVDA 0.21% , now America’s largest semiconductor company by value, in April said it was planning new chips for the data-center market, raising the competitive pressure on Intel.
Intel shares fell 1.3% on Tuesday. AMD’s stock advanced 2.8%, and Nvidia rose 0.2%.
continues at wsj.com |
