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Intel Grows Data Center Server CPU Business as Cascade Lake Looms

Intel executives are celebrating this week as the company reported its best quarter in Intel's 50-year history. Looking forward, however, there are increasingly competitive challenges, as rival AMD looks to release a 7nm-based CPU while Intel has yet to release its 10nm chips.

Intel reported its third quarter fiscal 2018 financial results on Oct. 25, with revenue coming in at $19.2 billion, for a 19 percent year-over-year gain. Net income was reported at $6.4 billion, for a 42 percent gain over the third quarter of fiscal 2017.

The best performing unit within Intel was the company's Data Center Group (DCG), with revenue of $6.1 billion, for a 26 percent year-over-year gain. Intel reported DCG shipped more than 8 million CPUs during the quarter.

"In our data-centric businesses, we announced 95 new performance world records for Xeon Scalable and continue to see strong adoption while we work with customers to get ready for the transition to Cascade Lake," Bob Swan, Intel CFO and Interim CEO, said during his company's earnings call.

Cascade Lake is the codename for Intel's 14 nanometer (nm) server and PC CPU architecture and is the successor to the Skylake architecture that was first released in May 2017.

"Cascade Lake introduces hardware-based side channel mitigation, Intel DL Boost with 11x inference speed-up, and a revolutionary new technology, Optane DC Persistent Memory," Swan said. "We're deepening our engagement with customers on custom SKUs; in fact, we'll have 60 percent more custom SKUs in the Cascade Lake family than the prior generation."

Intel vs. GPU Vendors

Intel has come under increasing pressure in recent years by GPU vendors, which is a challenge that Swan said Intel is responding to. He noted there are multiple clients that are opting to use Intel CPUs instead of GPUs to accelerate workloads.

"Taboola chose Intel Xeon over GPUs for a massive inference speedup and scale-out across seven data centers, delivering 360 billion content recommendations monthly," Swan said. "Rolls-Royce will design autonomous ships running inference on Xeon and are evaluating more of our portfolio in a multiyear engagement."

10nm and Beyond

While Intel executives were highlighting improvements in the Cascade Lake 14nm silicon, the big question for many analysts is about 10nm chips.

"We continue to make good progress on 10-nanometer," Swan said. "Yields are improving, and we're on track for 10-nanometer-based systems on shelves during the holiday 2019 selling season."

Rival chip vendor AMD reported its third quarter financial results on Oct. 24, with executives talking about the company's next generation 7nm EPYC Rome processor that is now sampling.

Intel isn't quite ready to start talking about its 7nm roadmap yet.

"We haven't really given a timeline for 7-nanometer, so to say it's ramping earlier would be a little bit of a stretch," Swan said.

Intel 3Q18 Datacenter

Sean Michael Kerner is a senior editor at ServerWatch and InternetNews.com. Follow him on Twitter @TechJournalist.

This article was originally published on October 26, 2018
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