Intel announced new data center CPUs and GPUs, signaling continued competitive investment in AI/HPC market against NVIDIA and AMD.

Intel announced an update to their next-generation server chip – the Xeon CPU Max Series and the Data Center GPU Max – in the hopes of capturing market share from rival Advanced Micro Devices (AMD). This announcement comes on the heels of Intel's poor 2022 earnings report, targeted layoffs, restrictions on Chinese access to US semiconductor technology, and the return of Chief Executive Officer Pat Gelsinger. Under Gelsinger's leadership, Intel has been working to restore its dominance in semiconductor process technology, an effort that required the company to retool factories for expansion of its GPU business. However, R&D and production issues have delayed the shipment of the Xeon CPU Max Series, formerly called Sapphire Rapids, and the Data Center GPU previously known as Ponte Vecchio.

These delays have significantly impeded Intel's data center business, handing AMD 30.3 percent of the server processor market by the third quarter of 2022. Adding to Intel's challenges, Samsung overtook them in 2021 to become the world's primary semiconductor vendor by revenue, according to preliminary results by research firm Gartner, with Samsung capturing 13 percent market share compared to Intel's 12.5 percent. Intel's third-quarter earnings came in at $15.3 billion—$3.9 billion less than 2021's Q3 earnings and well below their historical norms. Despite these headwinds, Gelsinger stated that Intel is getting "to a better point of supply-demand equilibrium," noting that "we were way behind on demand and supply for many, many quarters in a row" and that the company expects "to be in a better supply-demand balance situation as we go into next year."

Both the Xeon CPU Max and the Data Center GPU have faced scrutiny in the HPC industry due to production delays, yet Intel reported in late September that it is shipping blades with Max Series GPUs to Argonne National Laboratory to power the Aurora supercomputer. The Xeon Max CPU is the first x86-based chip with high bandwidth memory (HBM), offering up to 56 performance cores constructed of four tiles with a 350-watt envelope, 64GB of high-bandwidth in-package memory, PCI Express 5.0 and CXL1.1 I/O. The Max Series GPU is Intel's highest-density processor, featuring more than 100 billion transistors in a 47-tile package with up to 128 gigabytes of high-bandwidth memory. According to Jeff McVeigh, Intel corporate vice president, the chips offer "a solution that maximizes bandwidth, maximizes compute, maximizes developer productivity and ultimately maximizes impact." The Max Series products will also power several other HPC systems critical for national security and basic research, including Crossroads at Los Alamos National Laboratory, CTS-2 systems at Lawrence Livermore National Laboratory and Sandia National Laboratory, and Camphor3 at Kyoto University.

Intel stands to benefit significantly from the Biden administration's Chips and Science Act, approved by Congress in August, which aims to increase domestic semiconductor manufacturing with a $50 billion investment in companies that apply. Unlike fabless competitors such as AMD and Nvidia that design chips but do not manufacture them, Intel has direct manufacturing operations and could receive substantial subsidies. Intel has stated it hopes to receive as much as $3 billion for each new fab it builds in the U.S., noting that the $3 billion per fab is a cap in the legislation. However, BofA Securities Analyst Vivek Arya remains skeptical of Intel's turnaround prospects, arguing that the company's "goal of achieving process leadership by 2025 assumes flawless execution on five nodes in four years, which is tough to achieve." Intel's recovery strategy beyond GPU development has centered on big buybacks, cost-cutting measures, and the divestment of its profitable NAND memory business, while major customers Apple and Microsoft have compounded earnings losses by switching to chips they've begun manufacturing themselves.