High growth niche opportunities in the Microprocessor market and Intel

  • Machine learning or cognitive computing is getting popular with the portable devices
  • The niche requirements from AI, AR and VR will impact the microprocessor market
  • The market segments including AI, AR VR, wearable, and ADAS will push in the Intel’s revenue up in FY 2017

Intel’s “Client Computing Group” (CCG) has earned USD 10.6 billion in FY 2016, which was ~USD 2 billion up from FY 2015. CCG includes notebook, 2 in 1 systems, desktop computers for consumers and businesses, tablets, and phones. The company has manged to gain market share from AMD (US) for desktops and laptops segment. The company has hard time to push their smartphone solutions with Asus (Taiwan).

“Data Center Group” (DCG) has earned USD 7.52 billion in FY 2016, which was USD 300 million less than FY 2015. But the business arena of AI has experienced an outstanding progress in recent years. The artificial intelligence (AI) market is expected to be worth more than USD 15 Billion by 2022. This market will impact the chip makers, and will have specific requirements to fulfil. Intel has identified the importance of the technology and offers end-to-end AI solutions. Indication is to push Intel architecture in the high growth AI solutions.

The penetration of AI will impact the Intel’s revenue and expected to show good hike in the revenue. Penetration of AI will push the market for integrated GPU, which will help CCG group to grow further in FY 2017. In FY 2017 with next generation of Intel Xeon processors, the company will gain the market for niche high processing market, which will help DCG segment to recover and gain the market share. For instance, in March 2017, the company has announced the collaboration with Alibaba Cloud (China) for cloud based FPGA acceleration service.

With the Pokémon Go game, the popularity of the AR or VR based games has increased. Intel has launched Project Alloy which is an all-in-one virtual reality solution. This device will give immersive experience with Intel’s RealSense technologies which are optimized for VR usages. Intel has also collaborated with Microsoft to develop Windows-based content on Intel-based VR devices.The growing value chain of AR VR devices will surge the demand of high computing processors.

According to MarketsandMarkets, the virtual reality market is estimated to grow from USD 1.37 Billion in 2015 to USD 33.90 Billion by 2022, at a CAGR of 57.8% between 2016 and 2022. This market growth is very positive for Intel for growth in the market.

With the Curie module and Quark Microcontroller Developer Kit D2000 the company is eyeing on the niche wearable and IoT based products.

IN March 2017, Intel has acquired the Mobileye (Israel), the pioneer and leader in the vision based advanced driver assistance systems (ADAS).

The market segments including AI, AR VR, wearable, and ADAS will push in the Intel’s revenue up in FY 2017.

Swapnil Mali, Technology Analyst