& cplSiteName &

Intel Bets Chips on Network Platforms Consolidation

Iain Morris
5/19/2017
50%
50%

Chipmaker Intel is anticipating a round of consolidation in the "fragmented" market for network platforms, where it competes against a host of companies including Broadcom and Nvidia.

While the semiconductor giant is dominant in the data center business, with a market share of about 97%, it is one of numerous players vying for a bigger piece of the pie in networks.

Sandra Rivera, the general manager of Intel's network platforms group, says fragmentation makes the market ripe for consolidation, raising the prospect that some companies will be swallowed up during takeover activity.

It is unclear whether Intel Corp. (Nasdaq: INTC) could play an active role in this consolidation, but the company is certainly looking to its network platforms business for a sales boost.

Brian Krzanich, Intel's CEO, told analysts at the start of the year that he was counting on networking and storage, "where we have very low market share today," for growth at its data center business over the rest of the decade.

Rivera's network platforms business currently forms a small but rapidly growing part of the data center group, which -- in turn -- has been a star performer for Intel in recent quarters.

Sales at that division rose by nearly 8% in 2016, to $17.2 billion, accounting for about 29% of Intel's total. By contrast, revenues from the client computing group, Intel's biggest, were up just 2%, to $32.9 billion.

Unfortunately, Intel does not break out details of revenues from network platforms and Rivera is coy when pressed for a figure.

But during a previous conversation with Light Reading she revealed that her bit of Intel's business made between $1 billion and $1.8 billion in 2015. (See A Few Minutes With Intel's Sandra Rivera.)

Light Reading understands that revenues grew by roughly 40% last year, which would put them between $1.4 billion and $2.52 billion, and that Intel is aiming for sales growth of about 10% in 2017.

In this particular market, broader developments appear to have strengthened Intel. For one thing, the transition from purpose-built "black boxes" to cloud technologies is spurring the replacement of more specialized application-specific integrated circuits (ASICs) and digital signal processors (DSPs) with the general-purpose central processing units (CPUs) off which Intel has grown fat.

Intel will also welcome growing telco interest in "edge computing" with the forthcoming transition to 5G. If they are to support more advanced applications, operators may need to move computing resources out of centralized facilities and much closer to end users (at the network's "edge") to minimize "latency" -- the delay that occurs when signals travel over data networks. Any such investments in edge-computing facilities and new processing power should clearly benefit Intel. (See Intel Eyes Fab 5G Future, Not Another Mobile Mess.)


Want to know more about cloud services? Check out our dedicated cloud services content channel here on Light Reading.


While Intel appears to be on the attack in networks, its strategy for the rest of its data center group is basically a defensive one. Yet the challenges that Intel faces in both areas are related.

One comes from the UK's ARM, whose designs power the chips made by Broadcom Corp. (Nasdaq: BRCM), Qualcomm Inc. (Nasdaq: QCOM) and others.

ARM Holdings plc (Nasdaq: ARMHY; London: ARM) has been eyeing a much bigger role in the server market, partly through tie-ups with the makers of white boxes, and it is attracting interest from both telcos and web-scale giants. (See Qualcomm Challenges Intel With New ARM Chip.)

Last year, for instance, France's Orange (NYSE: FTE) flagged white box experiments in which it replaced x86 chips, based on Intel architecture, with ARM-based smartphone processors.

Far more troubling for Intel was the recent news that Microsoft Corp. (Nasdaq: MSFT) is planning to use processors from ARM licensee Qualcomm in its cloud servers. (See Microsoft, Qualcomm Bring ARM to Azure.)

With developments in artificial intelligence (AI), Nvidia Corp. (Nasdaq: NVDA) has emerged as another worry for Intel.

A maker of so-called graphics processing units (GPUs), Nvidia is seen as a potential threat to Intel's data center business in some corners of the industry. The basic rationale is that Nvidia's more specialized GPUs are better than Intel's general-purpose CPUs at supporting virtual reality, AI and machine learning applications.

The likes of Google and Microsoft have recently been drawn to these more specialized chips, and even investing in their own processor designs. (See Hypercloud Guys Make Big AI Push.)

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
The time has come for a telecom app store to save the industry.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Documentaries
Service Provider Panel: Partnering in the Digital Era

5|22|17   |     |   (0) comments


Coopetition has always been part of telecom, but the ecosphere now includes data centers, vendors, apps developers, cloud service providers and Internet content providers. This BCE 2017 panel explores the new attitudes among network operators as to the value and variety of ...
LRTV Interviews
Site Demo: AT&T's IoT Flow Platform

5|19|17   |   04:25   |   (0) comments


At AT&T's R&D center in Tel Aviv, Israel, project leader Eyal Segev talks about the operator's Flow platform and how it helps to prototype IoT applications.
LRTV Documentaries
Agent of Change: A Q&A With AT&T's John Donovan

5|18|17   |     |   (0) comments


Carol Wilson talks with the man leading AT&T's transformation efforts about the challenge of change.
LRTV Documentaries
BCE Service Provider Panel: The New Business Realities

5|18|17   |     |   (0) comments


For virtualization to happen, the telecom industry first has to grapple with key functional aspects of SDN and NFV that need to be universal, such as onboarding of virtualized network functions and federation of software-defined networks.
LRTV Interviews
BCE Service Provider Keynote: CenturyLink

5|16|17   |   22:32   |   (0) comments


Aamir Hussain leads the Product Development and Technology organization at CenturyLink, which includes the company's information technology function. He is an experienced senior technology executive with more than 25 years of proven success in the implementation of global technology operations, operationalization of complex technology, infrastructures and business ...
LRTV Interviews
CenturyLink CTO on Transformation

5|16|17   |   7:43   |   (0) comments


The 50-year-old telco has already gone through several transformations, including every time it made an acquisition, but its purchase of Level 3 coupled with changes in technology and customer expectations necessitates its biggest transformation yet.
LRTV Documentaries
Light Reading Hall of Fame 2017

5|15|17   |   5:05   |   (1) comment


Find out who made it into Light Reading's Hall of Fame this year.
LRTV Interviews
Site Visit: AT&T's Tel Aviv R&D Center

5|15|17   |   09:58   |   (1) comment


Nir Shalom, general manager and VP of application development at AT&T Israel, talks about the key service developments undertaken at the AT&T R&D facility in Tel Aviv and how the team there has adopted new ways of working.
Telecom Innovators Video Showcase
Act on Your Intelligence With Amdocs aia!

5|15|17   |     |   (0) comments


Amdocs CMO Gary Miles explains how communications service providers can seize the AI opportunity with Amdocs real-time digital intelligence platform.
LRTV Interviews
Logtel CEO: Making Sense of IoT

5|15|17   |   09:48   |   (0) comments


Jacques Bensimon, founder and CEO of Tel Aviv-based training and consultancy Logtel, talks about the need to make IoT more than just a buzzword.
LRTV Huawei Video Resource Center
The Challenges of Mobile Banking Implementation

5|12|17   |     |   (0) comments


Kamal Quadir of bKash Limited explains the challenges and needs of implementing mobile banking in the Bangladesh market.
LRTV Interviews
Tel Aviv: A Hub of Innovation

5|10|17   |   07:58   |   (0) comments


Light Reading's Ray Le Maistre and Dan Allen discuss the technology innovation, food and amazing sights they witnessed during a recent trip to Israel.
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
BSS Is BS, Says KPN Tech Boss
Iain Morris, News Editor, 5/16/2017
AT&T's Donovan: Women Adapt Faster Than Men
Sarah Thomas, Director, Women in Comms, 5/18/2017
Verizon on M&A: Who Needs a Cableco?
Mari Silbey, Senior Editor, Cable/Video, 5/17/2017
Standardization Needs Room for Innovation
Mitch Wagner, Editor, Enterprise Cloud, 5/17/2017
WiCipedia: LL Awards, Tech Mom Returnships & How The Post Gets the Ladies
Eryn Leavens, Special Features & Copy Editor, 5/19/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.