TL;DR: Intel is currently between a rock and a hard place in the GPU market, and a noted analyst believes it may be time for the chipmaker to cut its losses and move on.
Jon Peddie of Jon Peddie Research explained the scenario in a recent editorial highlighting Intel CEO Pat Gelsinger’s willingness to jettison projects that don’t work. The chipmaker announced plans to sell its NAND business to SK Hynix for $9 billion in late 2020 and will no longer operate its aerial drone business. Last month, Intel said it will end its Optane memory business.
Since Gelsinger rejoined Intel, Gelsinger has scrapped six business units, saving the company approximately $1.5 billion in costs and losses.
Intel’s dedicated GPU ambitions got off to a good start with the surprising appointment of Raja Koduri as the division’s chief architect. Intel has brought in other big names, including former Nvidia engineer Tom Petersen, but so far very little has been seen.
As Peddie points out, Intel has reported a $2.1 billion loss since the first quarter of 2021, when it began sharing information about its dedicated GPU group. In fact, the research firm believes Intel has invested more, with the actual figure perhaps closer to $3.5 billion.
Intel’s dGPU intentions were noble, but according to Peddie, the results so far in the consumer space have been “a disgrace.”
Our very own Steven Walton recently got an Intel Arc A380 – the company’s most entry-level model – from China. Unsurprisingly, the card didn’t blow anyone’s socks off and Steven recommends that you don’t buy an Intel Arc GPU in its current state.
Frankly, it would be extremely disappointing if Intel didn’t go through. Intel’s first generation of discrete GPUs would never be profitable, the execution would never run flawlessly or even smoothly, and it would always take 3 or 4 generations for them to get going. We assumed Intel knew this and budgeted for it, but we’ll see if this somehow works out. — Steven Walton
Most believed that Intel’s first GPUs would have problems with driver optimization, and some of that has probably come to fruition. More recently, however, we’ve heard that the Arc series may suffer from fundamental hardware issues that cannot be resolved by tweaking drivers.
Falling graphics card prices and improved availability from AMD and Nvidia won’t help Intel’s efforts either. This trend is only likely to continue as long as crypto miners continue to sell their equipment amid local repression and cooling of coin values.
As for Peddie, be believes Intel should “probably” find a partner and sell the group, but believes it currently has a 50-50 chance of going either way.