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Intel (INTC) Unveils 3rd Gen Xeon Processors: Main Takeaways

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Intel (INTC - Free Report) recently unveiled its third-generation Intel Xeon Scalable processors (dubbed as Ice Lake), which are based on 10 nanometer (nm) process technology. The latest processors offer 46% improvement in performance for popular data center workloads versus the previous generation, per Intel’s estimates.

These processors are optimized for workloads across high performance computing (HPC), hybrid cloud, 5G and intelligent edge. The company has already shipped more than 200,000 units of the new Xeon Scalable data processors in the first quarter of 2021.

The chipmaker noted that more than 800 cloud service providers, globally, leverage its Xeon Scalable platform. Intel stated that most big names in the cloud space are expected to provide cloud services backed by latest Xeon Scalable processors in 2021.

Intel Corporation Price and Consensus


Intel Corporation Price and Consensus

Intel Corporation price-consensus-chart | Intel Corporation Quote


Robust Features

The third-generation Xeon processors comprise in-built Artificial Intelligence (AI) acceleration (Intel DL Boost technology) along with wide-ranging turnkey and software optimization solutions. As a result, AI can be integrated with various applications across various environments (cloud, edge and network) with these processors. The company further noted that these optimizations will help improve AI performance by 74% compared with previous generation of data center processors.

The new Xeon processors are also embedded with a slew of new security features to speed up development of innovative solutions that boost data security. The chipmaker has added Intel Total Memory Encryption (TME), and Intel Platform Firmware Resilience (PFR) along with Intel Software Guard Extension (SGX) across the third-generation Xeon platform.

The latest processors also feature embedded crypto acceleration that helps add extra security to the protection of consumer data without compromising system performance or response time, noted Intel.

The new Xeon Scalable chips deliver up to 40 cores per processor and feature up to 8 channels of DDR4-3200 memory per socket along with up to 64 lanes of PCIe Gen4 per socket. The processors provide support for up to 6 terabytes of system memory per socket.

Intel’s third-generation Xeon Scalable platform is embedded with Intel Optane persistent memory 200 series along with Intel Ethernet 800 Series Network Adapters and Intel Agilex FPGAs. The platform also features Intel Optane Solid State Drive (SSD) P5800X and Intel SSD D5-P5316 NAND SSDs, which is suitable for low latency workloads.

The robust features are expected to drive adoption of Intel’s latest Xeon Scalable platform for data centers and consolidate its competitive position against the likes of Advanced Micro Devices (AMD - Free Report) and NVIDIA (NVDA - Free Report) .

Proliferation of AI into hardware system is becoming mainstream as exponential growth in data requires efficient systems to support processing of workloads. Per a Mordor Intelligence report, global data center accelerator market is expected to witness a CAGR of 14.98% between 2021 and 2026.

The market prospects benefit Intel’s growing focus on delivering solutions to effectively handle data center workloads and improve performance.

Intel Turnaround Initiatives

Intel, which carries a Zacks Rank #4 (Sell), has been plagued by series of delays regarding its 7 nm technology development. Last year, the company detected a defect mode in 7 nm process, which caused yield degradation. As a result, initial production shipments of Intel’s first in house-based 7-nm data center CPU design are now scheduled in the first half of 2023.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, AMD is currently utilizing Taiwan Semiconductor Manufacturing Company’s 7 nm process technology, which is enabling it to deliver its advanced 7 nm chips faster to market.

Intel is now working on its turnaround strategy after a series of delays and setbacks. The company brought on board Pat Gelsinger, who took up CEO responsibilities in February 2021. Gelsinger has previously worked with Intel for three decades and recently served as the CEO of VMware (VMW - Free Report) from 2012.

The company recently announced $20-billion investment to set up two factories (fabs) at its Ocotillo campus in Chandler, AZ.

Intel is well-poised to benefit from increasing demand for its 10 nm SuperFin process-based 11th Gen core processors, triggered by coronavirus-induced remote work and online learning wave amid strong traction witnessed in PC market. Mobileye growth is anticipated to be driven by design win momentum and a recovering automotive industry through 2021.

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