There’s good news for Intel, as it has beaten expectations with its latest financial forecasts. Perhaps that’s why CEO Pat Gelisinger is so bullish about the threat from a new generation of Arm chips.
During an earnings call with investors, Gelsinger dismissed the threat to Intel’s traditional x86 CPUs from a new generation of Arm chips announced by Qualcomm and reportedly planned by AMD and Nvidia, too.
“Arm and Windows client alternatives, generally they’ve been relegated to pretty insignificant roles in the PC business. We take all our competition seriously, but I think history is our guide here. We don’t see these as potentially being all that significant overall,” Gelsinger said.
Slightly contradicting himself, however, Gelsinger also opined that Arm chips could be good for Intel’s nascent customer foundry business where Intel uses its fabs to build chips for customers.
“Thinking about other alternative architectures like ARM, we also say wow, what a great opportunity for our foundry business.” It’s hard to see how Intel is going to make much money fabbing Arm chips for customers if history proves they’re going to remain insignificant.
Anywho, all this comes in the wake of Qualcomm announcing a new Arm-based CPU explicitly designed for PCs and with performance claims that rival the best existing x86 processors. Then there are those reports that suggest both Nvidia and AMD are planning to roll out Arm chips with Qualcomm’s exclusive deal with Microsoft due to expire in 2024.
As it happens, Microsoft itself expects Arm chips to make up 25% of the PC market by 2027. If that happens, it would surely be “significant”. Still, whatever happens with the whole x86-versus-Arm thing, Intel’s fortunes seem to be on the up.
Intel has increased its revenue forecast for the current quarter from $14.6 billion to $15.6 billion, and also increased earnings per share expectations, all the while predicting that PC sales are about to rebound.
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The latest analyst data supports that, with Q3 2023 showing a much smaller contraction in PC sales, year-on-year, than previous quarters. It seems the market could be bottoming out.
What this all means for PC gaming, on the other hand, is less clear. Given the high technical demands of gaming, it’s likely that gaming rigs will be the last preserve of x86 chips should the market shift decisively in the direction of Arm processors.
Meanwhile, if PC sales boom again, what impact will that have on, for instance, CPU and indeed GPU pricing? Graphics card pricing in particular has been painful despite weak PC sales. It’s hard to imagine an increase in demand for PCs helping with that.
