Intel’s Response to the Threat of ARM Chips: Unbothered or Ignorant?
Intel downplays potential impact of ARM on market dominance | ENBLE
Intel remains unconvinced that ARM poses a significant threat.
Have you heard the buzz about Nvidia and AMD potentially launching their own ARM-based client processors? The anticipation is building, and with predictions that ARM chips could capture up to a whopping 30% of the PC market in the coming years, it’s easy to understand why competitors might start feeling the heat. However, amidst all this commotion, Intel, the long-standing behemoth, seems unfazed. But are they underestimating the threat?
Currently, Intel dominates the client CPU market, closely followed by AMD and its impressive lineup of processors. Both companies rely on the x86 system architecture, which has served them well. However, Microsoft seems to have a soft spot for the ARM architecture, and with AMD and Nvidia joining the party soon, the landscape could change. Although Qualcomm currently holds an exclusive deal for producing ARM-based chips for Windows devices, that agreement will expire in 2024, opening the floodgates for other manufacturers. So, the transition to ARM for Windows machines is looking more probable than ever.
This shift towards ARM could potentially spell bad news for Intel. After all, the ARM architecture has shown its prowess with Apple’s M1 and M2 silicon, making it tempting for other tech giants to jump on the bandwagon. However, during a recent earnings call with investors, Intel CEO Pat Gelsinger seemed unperturbed by the notion.
“ARM and Windows client alternatives, generally they’ve been relegated to pretty insignificant roles in the PC business. We take all our competition seriously, but I think history is our guide here. We don’t see these as potentially being all that significant overall,” proclaimed Gelsinger confidently.
Well, those are some fighting words, considering the mounting evidence pointing towards ARM’s growth in the years to come. Research firm Canalys projects that ARM chips could make up around 30% of all PCs by 2026, while Microsoft pegs it at a slightly more conservative 25% by 2027. And let’s not forget that Intel already lost its foothold in Mac devices to Apple’s ARM chips.
But hold on a second! Gelsinger’s comments seem a bit contradictory. He actually sees some potential in ARM, albeit in a different context—Intel’s own fabs. During the same call, he exclaimed, “Thinking about other alternative architectures like ARM, we also say ‘wow, what a great opportunity for our foundry business!’”
Overall, things are looking up for Intel. According to Reuters, the company has raised its revenue forecast for the third quarter of 2023, from $14.6 billion to $15.6 billion. Additionally, Intel expects a increase in profit per share to approximately 44 cents, up from the previously estimated 32 cents.
Part of Intel’s cause for celebration is the rebounding PC market. After experiencing a downward trend for some time, sales in this sector have finally stabilized. Although Intel still faces a slight decline in the client PC market for the third quarter, the drop is considerably smaller, falling only 3% to $7.9 billion.
But let’s entertain the idea that Intel’s predictions might be wrong. What if ARM does wrestle up to 30% of the PC client market away from its competitors? Well, brace yourself for a whole lot of variety in devices that operate using a system on a chip (SoC). While the PC gaming sphere will likely remain unaffected, it would undoubtedly be fascinating to witness SoCs built by AMD, Nvidia, Qualcomm, and of course, Intel, all fiercely competing against one another.
So, what’s your take on the whole Intel vs. ARM battle? Do you think Intel’s confidence is justified, or are they potentially underestimating the rise of ARM chips? Join the conversation and let us know your thoughts!
