The ax returns to Intel – and this time, it’s taking out the troubled chip giant’s Data Center Solutions Group (DSG). The group, which offered datacenter server designs that were popular in some regions outside North America, is having its portfolio sold to MiTAC, the Taiwanese parent company for well-known servermaker Tyan.
Intel is framing the shuttering of the group as part of its prioritization of the “IDM 2.0” strategy, pitched by CEO Pat Gelsinger as a major evolution of Intel’s integrated device manufacturing (IDM) model. The vision for IDM 2.0 encompasses three core elements: building a “global, internal factory network for at-scale manufacturing”; “expanded use of third-party foundry capacity”; and “building a world-class foundry business.” Importantly, that list of priorities does not closely align with many other businesses that Intel found itself in just a couple of years ago.
Intel has said little publicly about the sale, and an Intel spokesperson provided the following statement to HPCwire, which is the same statement it has been sharing with others: “In line with Intel’s continued efforts to prioritize investments in its IDM 2.0 strategy, we have made the difficult decision to exit our Data Center Solutions Group (DSG). As part of this plan, MiTAC, an edge-to-cloud IT solutions provider and longstanding ODM partner of DSG, will have the right to manufacture and sell products based on our designs. We are focused on ensuring the DSG team and its stakeholders are supported during this transition.”
DSG is just the latest casualty of Intel’s aggressive streamlining of its business. The company has exited a number of similarly peripheral markets over the past couple of years: Intel Optane memory, which ended with a $559 million inventory writeoff in July 2022; Intel Tofino network switches, which were part of the 2019 Barefoot Networks acquisition and were discontinued in January 2023; a $700-million “mega lab” focused on datacenter cooling, announced in May 2022 and also killed in January 2023; and the RISC-V Pathfinder program, announced in August 2022 and – you guessed it – killed in January 2023. The streamlining even hit closer to Intel’s core products with the cancellation of the next-gen Max series GPU (codenamed Rialto Bridge) and the dramatic retargeting of the Falcon Shores “XPU,” which was slated to be a combo CPU-GPU (à la Nvidia’s Grace Hopper Superchip) but is now planned as a GPU only.
While there is minimal expected impact on Intel’s HPC activities, IDC analyst Peter Rutten suggested the move could have some server R&D dampening effects.
“This is not going to be consequential for HPC,” Rutten, IDC’s global research lead on performance-intensive computing solutions and use cases, told HPCwire. “Intel had one entry in the Top500 … as a manufacturer, and that one was started up in 2011. It’s unfortunate for server R&D, though. Intel did some interesting things in that group.”
“For example, In July 2019, Intel launched the S9200WK, a fully integrated liquid- or air-cooled system with specialty Cascade Lake processors that were aimed at providing extreme performance. The processor had 12 DDR4 memory channels, twice as many as a standard Cascade Lake processor; Intel’s DL Boost Instruction for Inference, which improves inference performance with neural networks; and multichip packaging optimized for performance density with four UPIs per socket enabling one-hop communication between any dies on a dual-socket node. The complexity of the packaging, which allows for very high density, with 80 PCIe Gen3 lanes per liquid-cooled 2U node, is the reason why Intel decided to deliver a complete system rather than just a chip.
“These types of developments, that maybe a server OEM might not venture into, will be gone – unless MiTAC continues them. But, I can imagine they weren’t very profitable,” he said.
Gelsinger’s cost-cutting moves come during tremendous pressure on Intel to right the ship: the company is set to receive enormous subsidies under the CHIPS and Science Act in an effort to establish a more sovereign Western computing supply chain, but those subsidies are arriving amid extensive delays in flagship products and systems, not to mention fairly abysmal earnings (the Data Center and AI [DCAI] business unit was down 33% in Q4 2022 versus Q4 2021).