Intel is striving to make a mark in the GPU market, currently dominated by NVIDIA and Advanced Micro Devices.
The semiconductor giant’s decision to hire Tom Peterson, former director of technical marketing at NVIDIA, is a step toward that direction.
Notably, Tom Peterson, popularly known as “TAP” has served NVIDIA for almost 15 years and recently announced his departure. Intel intends to utilize Peterson’s expertise in the company’s Game Experience Team.
Intel’s talent acquisition strategy focused on graphics also involved hiring of Raja Koduri and Chris Hookfrom AMD, and Jim Keller from Tesla in the past.
Notably, Koduri, who leads Intel’s graphics team, enabled the company to come up with a teaser of upcoming dedicated graphics card. In fact, the graphics card is scheduled to hit the market as early as 2020.
Intel also acquired Hyderabad, India-based Ineda Systems, a fables chip maker, to accelerate its discrete GPU business initiatives. Almost 100 engineers of Ineda Systems with SoC (or system on chip) expertise are said to be part of Intel's graphics division.
Intel Faces Tough Challenge
Growing proliferation of artificial intelligence (AI) techniques and machine learning (ML) tools in industries like gaming, automotive, blockchain and cloud computing are primarily responsible for driving GPU demand. Increasing allegiance to video streaming services also deserves a special mention in this regard.
Intel Corporation Revenue (TTM)
Per latest IHS Markit data, “consumer spending on cloud gaming content subscriptions reached $234 million in 2018 and is forecast to grow to $1.5 billion by 2023.”
The strong growth prospects of the space have been alluring for Intel. However, the fight will certainly not be an easy one as NVIDIA and AMD have dominated the space for the past two decades. NVIDIA’s dominance in the market on account of the significantly higher functionality of its GPU cards is noteworthy.Meanwhile,AMD’s expanding GPU portfolio catering to every price points cannot be ignored.
Per latest JPR report, AMD holds discrete GPU market share of 18.8% in the fourth quarter of 2018, compared with NVIDIA’s 81.2%.
Advanced Micro Devices, Inc. Revenue (TTM)
However, Intel’s efforts to make its foray in the discrete GPU market as grand as possible, holds potential to threaten the duopoly. The company’s presence is expected to negatively impact pricing and high margins enjoyed by both NVIDIA and AMD.
In particular, Intel’s strength in installed base, integrated graphics card expertise and enhanced IP portfolio, are likely to challenge NVIDIA’s competitive moat.
NVIDIA Corporation Revenue (TTM)
Intel is optimistic about its foray into the GPU market with Xe graphics family of discrete GPUs, dubbed Arctic Sound. The company also intends to enable the new graphics cards to support its OneAPI software, which simplifies programming across the company’s CPU, GPU, AI and FPGA accelerators.
Higher the competition, greater is the motivation to innovate, which bodes well for the industry. We also believe that Intel’s entry into GPU market will be welcomed by consumers as it likely to lead to reduction in pricing parameters.