Intel has launched its sixth-generation Xeon server processors, a pivotal move aimed at reclaiming its data center market share from AMD. On Tuesday, Intel also announced its Gaudi 3 artificial intelligence accelerator chips, priced significantly lower than competitors’ offerings.
The release of the new Xeon chips comes at a critical time for Intel. Over the past year, the company has seen its share of the x86 data center market decline by 5.6 percentage points to 76.4%, while AMD has increased its share to 23.6%, according to Mercury Research. This shift is largely due to Intel’s recent manufacturing challenges, which have allowed AMD to gain ground by leveraging Taiwan Semiconductor Manufacturing Co for its chip production.
The new Xeon 6 server processors are available in two main variants: a high-performance model and an “efficiency” model. The latter is particularly notable as it requires about 67% fewer server racks to achieve the same computing power as Intel’s second-generation chips. This model is tailored for media, web services, and database computations.
“Simply put, performance up, power down,” said Intel Chief Executive Pat Gelsinger during his presentation at the Computex trade fair in Taipei. He highlighted the significant advancements in efficiency and power reduction that these new processors offer.
The high-performance Xeon model is engineered to handle complex AI computations and other demanding tasks requiring substantial processing power. The “efficiency” model is available immediately, while the performance version is expected to be released in the third quarter. Additional variations of the sixth-generation Xeon chips are scheduled for launch next year. The release was delayed by a year due to Intel’s shift to a different manufacturing process.
In a briefing with reporters, Intel disclosed that a Gaudi 3 accelerator kit, which includes eight AI chips, is priced at approximately $125,000. This is a substantial increase from the $65,000 list price of the earlier Gaudi 2 generation. Gelsinger emphasized the competitiveness of these prices, noting that they are significantly lower than those of rivals like Nvidia. For instance, a comparable Nvidia HGX server system with eight H100 AI chips can exceed $300,000, according to custom server vendor Thinkmate.
Intel first introduced the Gaudi 3 AI chip details in April, positioning it as a more affordable alternative to Nvidia’s H100 chips. This strategic pricing aims to attract cost-conscious buyers seeking powerful AI solutions without the hefty price tag associated with Nvidia’s offerings.
In addition to the new Xeon processors and AI chips, Intel also announced its next-generation laptop chip, Lunar Lake. This chip boasts 40% less power consumption and includes a more robust AI processor. Intel plans to ship Lunar Lake in the third quarter.
As Intel navigates fierce competition with AMD and Nvidia, these new product launches reflect the company’s commitment to innovation and regaining its leadership position in the data center market. With significant improvements in performance and efficiency, along with competitive pricing, Intel is poised to make a strong comeback in the semiconductor industry.
