Inside Advanced Scale Challenges|Friday, November 24, 2017
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Intel Heads List of Strong 3Q Tech Results 

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Intel Corp. reported strong revenue growth during its third quarter as its "data-centric" strategy begins to take hold in key technology sectors like all-flash storage. Meanwhile, it is readying a new AI chip.

Intel was among several leading U.S. technology companies reporting strong revenues this week along with Amazon and Google. The chipmaker reported revenue totaling $16.1 billion for its third quarter, about $400 million higher than forecast. Intel said it is revising its annual revenue forecast up by $700 million to $62 billion.

As the chipmaker continued its push into machine learning and driverless cars, it held steady in its core businesses. For example, datacenter revenue grew 7 percent during the third quarter to $4.88 billion, the company reported.

"Our data-centric businesses grew 15 percent year over year, reaching 45 percent of our revenue, proving that Intel is becoming a data-centric company," Intel CEO Brian Krzanich asserted during an earnings call on Thursday (Oct. 26).

Intel and other flash memory vendors are rolling out high-density arrays as they hustle to meet demand for storing soaring volumes unstructured data while preserving low-latency performance requirements for emerging data analytics applications.

Those market demands are reflected in recent earnings results, with Intel reporting that its memory business grew 37 percent over last year. The chipmaker said its 3-D NAND memory technology accounted for more than 70 percent of bits-per-cell during the third quarter. The company also shipped its first 64-layer datacenter SSDs while its FPGA revenue grew 10 percent over the previous year.

Overall, the company said its core NAND business and remains profitable while demand for higher-density flash arrays continues to grow.

Krzanich said Intel would begin shipping its Nervana neural network processor by the end of this year. The AI chip stems from the company's 2016 acquisition of startup of Nervana Systems. The company (NASDAQ: INTC) claims the device will be among the first commercial AI processors, and is designed to compete against a batch of new high-end GPUs from Nvidia (NASDAQ: NVDA) that are being deployed by a growing list of enterprise IT vendors.

Intel recently announced a partnership with Facebook (NASDAQ: FB) accelerate development of AI chips. Krzanich told an industry forum last week that Intel is planning "a whole family of silicon" around AI applications.

Much of the datacenter growth stems from the emergence of AI and machine learning as primary cloud workloads. Krzanich said AI applications would continue to drive the chipmaker's revenues. "Machine learning, it's the smallest segment to a workload if you look at the datacenter, but the fastest growing," he noted. "So you're going to see it continue to become a bigger and bigger portion of our business."

Market watchers were impressed. "Intel had a blowout Q3, which shows how well the company is managing investing in the future while optimizing their current product lines," noted market analyst Patrick Moorhead of Moor Insights and Strategy. "This is the second quarter Intel's transformational efforts have started to pay off."

Intel was among several enterprise IT leaders reporting strong gains during what is typically the best quarter for revenues and earnings. Both Alphabet (NASDAQ: GOOGL), the parent company of Google, and Amazon (NASDAQ: AMZN) reported strong quarterly results. Amazon Web Services again continues to drive profits, with quarterly cloud revenues reaching $4.6 billion.

About the author: George Leopold

George Leopold has written about science and technology for more than 25 years, focusing on electronics and aerospace technology. He previously served as Executive Editor for Electronic Engineering Times.

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