Intel Corp. Chief Executive Officer Bob Swan says he’s willing to forsake the company’s traditional dominance of the market for central processing units in order to meet the rising demand for newer, more specialized silicon chips for applications such as artificial intelligence and autonomous cars.

Speaking at the private Credit Suisse technology conference in Scottsdale, Arizona, early last week, Swan (pictured) said he was hoping to “destroy the thinking” about his company owning a 90% share of the CPU market in order to focus on newer technologies.

Intel’s longtime dominance of the CPU market, where it has held a 90% market share for years, is so well-established that the company’s revenue is often used as a proxy to gauge the segment’s total available market, or TAM.

But Swan said that trying to maintain its 90% market share has had a detrimental effect on Intel because it means the company misses out on other opportunities, and that could be harmful as technologies such as AI become more widespread. Instead of protecting the 90% market share in CPUs, Swan wants Intel to command a smaller 30% market share in “all silicon.”

“I’m trying to destroy the thinking about having 90% share inside our company because, I think it limits our thinking, I think we miss technology transitions,” Swan said. “We miss opportunities because we’re, in some ways preoccupied with protecting 90%, instead of seeing a much bigger market with much more innovation going on. So we come to work in the morning with a 30% share, with every expectation over the next several years that we will play a larger and larger role in our customers success, and that doesn’t just mean CPUs.”

Rather than focus only on CPUs, Swan wants Intel to become a leader in the market for graphics processing units and accelerators such as field-programmable gate arrays, which are increasingly being used to power AI workloads such as machine learning. Those markets are currently led by Intel’s rivals Nvidia Corp. and Advanced Micro Devices Inc., but Swan said he believes Intel is well-positioned to challenge them.

“So, we’re looking at a company with roughly 30% share in a $288 billion silicon TAM,” he said.

Wccf Tech said Intel would likely have to cede some market share in CPUs in order to achieve this goal, but would benefit from becoming “more diversified.” It said Intel is already poised to achieve that goal thanks to new products such as its Nervana processor for AI workloads and Xe GPUs.

Chip supply problems

Intel might dominate CPUs at present, but it has also struggled to keep up with demand for its chips in recent months. Intel has been quite open about that and recently issued a warning to customers that the situation will likely continue for several more months. But up until now, it hasn’t explained exactly what’s behind its inability to keep up with demand.

Swan said three factors had contributed to this. First, demand for CPUs had risen much faster than anticipated. Second, the company this year began manufacturing smartphone modems in-house, which used up a significant chunk of its production capacity. Third, the delayed launch of its 10-nanometer process meant Intel had to instead build higher performance into its previous-generation 14-nanometer CPUs, which meant those chips take longer to produce.

“So those three things – growing much faster than we thought, bringing modems inside and delaying 10 nanometer — resulted in a position where we didn’t have flexible capacity,” Swan said.

Photo: 360 El Salvador/Flickr