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Intel's Challenge In The Data Center And The Emergence Of Ampere (Podcast)

By Daniel ShvartsmanStock MarketsNov 02, 2021 18:30
ng.investing.com/analysis/intels-challenge-in-the-data-center-and-the-emergence-of-ampere-podcast-96031
Intel's Challenge In The Data Center And The Emergence Of Ampere (Podcast)
By Daniel Shvartsman   |  Nov 02, 2021 18:30
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The semiconductor industry is in a period of transition. On the one hand, you know about the supply chain shortages, which have led many in and outside the industry to say that we’ve moved past the cyclical ups and downs of the industry towards a more secular, long-term growth trend. Semiconductors are used in everything, from cars to phones to refrigerators, and so as we want more of everything, we’ll want more semiconductors.

Then there are the dynamics in the industry. The once untouchable leader, Intel (NASDAQ:INTC), has given up its process advantage to Taiwan Semiconductor (NYSE:TSM) and its stock market leadership to Nvidia (NASDAQ:NVDA) and a handful of other names. The Arm-based chips, supported by TSM’s foundry capabilities, have reopened the door to a number of start-ups coming for Intel’s or even Nvidia’s throne. The consolidation of the 2010s is giving way to fresh competition.

And lastly, there’s the emergence of Artificial Intelligence, or AI, a cutting-edge series of technologies that already affects our lives on a daily basis, and which is only going to increase in adoption, usage, and relevance in the years to come. Those technologies and calculations require a great deal of computing power, however, and that computing power often comes at great energy costs, which places new demands on the semiconductor industry to square that circle.
Intel's recent earnings report included a plan to invest a huge amount into building out chip capacity, and in some sense vindicated the feeling that they have work to do to catch up to TSM. They also have defensive work to do, as companies in-source production as in Amazon (NASDAQ:AMZN)'s case, or as new start-ups compete in the lucrative server space.


On the Razor's Edge, an investing podcast that we're now sharing through Investing.com, we are doing a short series on the future of compute, speaking with several executives and experts in the field to hear what the state of semiconductors, technology usage, and artificial intelligence from the hardware and software side looks like.

We kick that off with this episode with Jeff Wittich, Chief Product Officer at Ampere. Wittich, like several of his Ampere colleagues including CEO/founder Renee James, is an Intel veteran. Ampere’s aim is to develop server chips designed explicitly for cloud usage, using an ARM chip framework, with the target of delivering much greater power efficiency. They’re lined up against their old employers, Intel, and its x86 monopoly in the data center market. And it seems to be gaining traction, with the most recent evidence being reports SoftBank is considering an investment in Ampere at a $8B valuation.

We speak with Jeff about Ampere’s journey, about why now is the time for Arm-based chips in servers, about how hyperscalers shape the industry’s demands, the state of semiconductors, and of course a bit on Intel and its challenges. I'd point to the 28:30 mark as especially relevant for those thinking about Intel's position in the sector.

You can subscribe to the Razor's Edge on Spotify or:Apple).

Topics Covered

  • 4:00 minute mark – Ampere’s story
  • 6:00 – What does a cloud focus mean for a chip maker?
  • 11:30 – ARM’s experience in the data center world
  • 16:45 – Why now for ARM-based server chips?
  • 19:30 – TSM’s passing Intel and Intel losing its data center advantage
  • 24:30 – The role of the hyperscalers as pace setters for cloud hardware
  • 28:30 – Can Intel hold onto a shrinking datacenter TAM?
  • 30:30 – The inflection point in the competitive landscape
  • 35:00 – The in-house vs. outsourcing question for AI companies
  • 41:00 – The inference vs. training distinction and the role of the CPU
  • 47:00 - Optimizing for AI workloads
  • 50:30 – How is Ampere lasting when other companies quit
  • 55:30 – Supply chain outlook
  • 58:30 – Risk of a cyclical downturn?
  • 1:01:30 – Lightning round and edge vs. cloud


Disclaimer Daniel Shvartsman is long TSM and AAPL. Akram's Razor has no positions in stocks mentioned. Nothing on this podcast should be taken as investment advice of any sort.
Intel's Challenge In The Data Center And The Emergence Of Ampere (Podcast)
 

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Intel's Challenge In The Data Center And The Emergence Of Ampere (Podcast)

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