Growth Drivers for Intel Corporation’s Data Center
Intel, a microprocessor giant, has declared that its Data Center Group will be its main growth driver for many years to come. The corporation managed to earn about $15 billion in revenue in 2015, which translates to almost $8 billion in operating income. Last November, Intel predicted a 15 percent compounded annual revenue growth rate for the corporation through 2019. The sales of both processors and non-processor components will drive this growth, according to Intel.
As long as this growth follows past trends, it will be a result of overall unit growth and selling price improvements. The other 3 percent of the total 15 percent annual growth rate will come from sales of non-CPU products.
Intel’s Non-CPU Parts
While most people know about the processors sold by Intel, few are familiar with the non-processor components developed and sold by Intel. However, in order to fully understand the growth drivers for the Intel Corporation’s data center, it is important to be familiar with these products.
At an investor meeting for the company, Intel talked about three different categories for products that could drive additional growth for its non-CPU parts. The first opportunity cited by Intel is the development and sale of silicon photonics parts. Intel believes that the entire addressable market for these parts will amount to $5 billion.
The next opportunity mentioned is the Omni-Path interconnect technology, a high-speed data center connectivity that is comparable to infiniband interconnect, which is well-established. Intel believes the entire addressable market for this opportunity will be almost $2 billion by 2020.
The final opportunity cited by Intel is the sale of memory modules developed with 3DXPoint memory technology. Intel developed this technology with Micron, a memory specialist. The total addressable market for this opportunity may be $24 billion by 2020.
When evaluating the growth drivers for the Intel corporation’s data centers, it is important to consider that Intel made these predictions before its acquisition of Altera, which is a programmable logic maker. While the financial results of Altera are separate from Intel’s data center group, it is expected that they will be integrated in the future.
