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Intel launches a new generation of processors as competition in the chip market heats up.

TraderKnows
TraderKnows
06-04

The chip market has recently been in the spotlight due to the AI boom, and Intel, as a traditional chip giant, is determined not to fall behind.

On Tuesday, Intel launched its next-generation Xeon server processors and announced that the price of its Gaudi 3 AI accelerator chip would be significantly lower than that of its competitors.

The sixth-generation Xeon chip is crucial for Intel as its data center market share has been eroded by AMD.

According to Mercury Research, over the past year, Intel's share of the x86 data center chip market dropped by 5.6 percentage points to 76.4%, while AMD's market share reached 23.6%.

Intel's manufacturing missteps have given AMD the opportunity to use Taiwan Semiconductor Manufacturing Company to produce its chips.

The Xeon 6 server processors come in two main types: a larger, more powerful version, and an "efficiency" model that Intel positions as a replacement for older chips.

Compared to the second-generation chips, the new efficiency model requires about 67% less server rack space and is designed specifically for media, web, and database computing.

"In short, performance is up, and power consumption is down," Intel CEO Pat Gelsinger said while introducing these servers at the Computex trade show in Taipei.

The more powerful performance models are intended to run complex AI models, response generation, and other tasks requiring higher computational power.

The "efficiency" Xeon chips will be available starting Tuesday, while the "performance" models will launch in the third quarter. Intel plans to release more variants next year. The launch of the sixth-generation chips was delayed by a year as the company sought to adopt a different manufacturing process.

During a briefing with reporters, Intel said that the Gaudi 3 accelerator package, which includes eight AI chips, is priced at about $125,000, compared to $65,000 for the previous Gaudi 2 model.

Speaking in Taipei, Gelsinger said these prices are "very attractive," especially compared to competitors.

"In other words, it beats the competition."

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