Data centre 'reset the bar', says Intel CEO

Chip giant sees a solid second quarter

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Data centre 'reset the bar', says Intel CEO Krzanich says the data centre continues to be a great growth engine for Intel.
By  Manda Banda Published  July 31, 2017

Intel's booming data centre business has catapulted the chip maker as "the rising force of the data revolution across different industries," CEO Brian Krzanich has said investors on the company's second quarter earnings.

"We are seeing that the data centre continues to be a great growth engine for the company," Krzanich said. "I'm very pleased with our product and I'm more confident than ever in Intel's growth. In Q2, we extended our leadership with new breakthrough products in client computing, data centre and memory... that reset the bar for performance leadership, and we're gaining customer momentum in areas like AI [artificial intelligence] and autonomous driving."

Overall, the chip giant posted earnings of $2.81bn or 72 cents a share for the second quarter ended July 1 on overall sales of $14.8bn, about 9% higher than the $13.4bn reported in the same quarter a year ago.

That revenue beat the outlook of analysts polled by Thomson Reuters, who predicted earnings of 68 cents per share on sales of $14.41bn. Intel's shares were up 4% at $36.17 in after-hours trading.

Partners were excited when Intel in July rolled out its new Xeon scalable server processor platform, which is aimed specifically at data centre applications with the new mesh-based Purley architecture to reduce latency at high core counts.

"The initial reaction to Xeon scalable has been extremely positive. It's the largest performance improvement in a decade gen-to-gen, so we are seeing a very large ramp in the second half as we move forward with this product," added Krzanich.

Intel's Data Centre Group, which the company said now accounts for more than 40% of its total revenue, grew 9% in the second quarter of 2017 to $4.4bn. Looking ahead, Krzanich said the company's data centre business remains on track to reach "high-single-digit" growth for the year.

Intel's Client Computing Group sales also grew in the second quarter, increasing 12% to $8.2bn. Intel has also been focusing on budding opportunities in the enthusiast market segment as part of its overall PC strategy. Earlier this year, the chip giant launched its Core X platform to equip gamers in the enthusiast segments with extreme performance and mega-tasking capacities.

Meanwhile, revenue from Intel's Internet of Things (IoT) Group shot up 26% to $720m in the second quarter, while its Non-Volatile Memory Solutions Group sales grew 58% to $874m.

"We feel great about where we are relative to our three-year plan and heading into the second half. Intel's transformation continues in the third quarter when we expect to complete our planned acquisition of Mobileye," added Intel CFO Bob Swan.

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