Intel’s perspective of the future market
Intel’s (INTC) market leadership in the PC (personal computer) and data center spaces has left little room for growth amid a slowdown in these markets. However, Intel’s CEO, Brian Krzanich, shared a different perspective at the Bank of America Merrill Lynch Global Technology Conference.
Krzanich stated that although Intel is a leader in the above two markets, there are certain subsegments in these markets in which the company has less than a 20% market share. The company is investing in segments with large total addressable markets in order to make its efforts fruitful. Krzanich calls these segments the company’s “big bets.”
In collaboration with Micron Technologies (MU), Intel has developed 3D NAND and 3D XPoint memory technologies. However, Intel isn’t entering the memory commodity market but the specialized memory market. More than 80% of Intel’s 3D NAND output is meant for the data center space, as it looks to bring memory closer to CPUs (central processing unit) in order to boost CPU performance.
Moreover, the company has developed a revolutionary 3D XPoint–based Optane SSD (solid-state drive), which could bring a large amount of storage into memory-like performance, improving a standard PC or server processor’s performance by 20%–30%.
Intel could integrate this Optane technology in its PC and server processors, and it could also sell the SSDs based on this technology as individual products to third parties. By 2021, Optane could open a $100 billion addressable market for Intel in the PC, data center, and memory spaces.
In the autonomous vehicle space, Intel is looking to provide an end-to-end solution from car to data center. It’s partnered with several automakers and high-definition mapping companies. It’s also acquired Mobileye (MBLY) to speed up its efforts in this space.
The autonomous car segment could present a $70 billion opportunity for Intel in the vehicle system space and a $30 billion opportunity for it in the data center and network space by 2030.
The lifeline of data and computing is high-speed network connectivity. The world is transitioning to 5G (fifth-generation) technology, and Intel and Qualcomm (QCOM) are at the forefront of this transition. The 5G transition goes beyond modem and into a software-defined network in which connectivity goes through the backhaul and into the data center.
How is Intel addressing these markets?
In order to tap this $250 billion opportunity, Intel is resorting to mergers and acquisitions of AI (artificial intelligence) startups and market leaders in the emerging technology space. Moreover, the company has hired new talent and promoted inner talent with experience in these emerging technologies.
In the coming articles, we’ll look at Intel’s various business segments and the strategies it’s adopted to grow in each of these segments.