Today at an annual meeting for investors, Intel Corporation executives discussed the company's strategy, key investments and top priorities for 2017. CEO Brian Krzanich said the flood of data being generated by smart, connected things and machines would be a driver of innovation and growth for Intel.
Krzanich called data "the most important force in technology." He said he expects Intel to "play a vital role in transitioning this data into practical and important tools to drive business and innovation."
The number of data-rich markets is large and growing quickly, which is also expanding the addressable market for silicon-based products. More data requires bigger, faster memory as well as new modes of connectivity and more IT spending on devices, data centers and networks. Data is also informing where Intel directs its R&D investments. Krzanich said: "If the market doesn't generate data, analyze data or use data to drive action, we won't play in it."
While some data-rich markets are nascent, Intel sees incredible profit potential. Intel has won a leadership position in the established markets for server and PC microprocessors, and these markets (worth an estimated $45 billion combined1) will continue to be significant sources of revenue, profit, scale and IP. That said, the company is setting its sights on a much larger silicon opportunity fueled by the explosion of data. Intel estimates the total addressable market for silicon will grow to $220 billion by 20212.
Intel plans to invest in opportunities that build on its strength in PCs and servers, leverage its manufacturing leadership, and benefit from Intel's scale. During the day, Intel executives shined more light on the biggest expected growth drivers and investment areas.
- Data Center: Diane Bryant, who leads Intel's data center business, said the continued rise of cloud computing and network transformation, and the growth of data analytics were the key growth drivers for Intel's data center business. She explained how Intel was well-positioned for long-term growth thanks to "an unparalleled array of assets" that includes an exciting portfolio of adjacency products, including silicon photonics, Intel Omni-path fabric, FPGAs and a broad portfolio of solutions for artificial intelligence.
- Memory: Whether on the device or in the cloud, capturing, analyzing and operationalizing more and more data will require bigger memory and faster storage. Intel's Non-Volatile Memory Solutions Group (NSG) is an adjacent, disruptive growth business with leading-edge technology and manufacturing capabilities. Rob Crooke, who leads Intel's memory business, explained the advantages of Intel's 3D NAND SSDs and Intel® Optane™ technologies, which have strong connections to Intel's core platforms in a fast-growing market segment that the company has participated in since its inception.
- The Internet of Things: Intel expects growth in its IOT business will outpace the market as the company focuses on vertical segments with multibillion-dollar market potential, including retail, industrial, video and transportation. Doug Davis, who heads Intel's Automated Driving Group, described fully-autonomous cars of the future as "data centers on wheels," explaining that their complexity and computing power will require multiple high-end Xeons, high-performance FPGAs, memory, high-bandwidth connectivity and more.
Intel's leading-edge manufacturing capability is another important investment area, and is foundational to the company's success. Murthy Renduchintala, who leads Intel's client, IoT and systems architecture groups, told investors that Moore's Law is alive and well at Intel. "We currently enjoy a three year lead over our competitors' current process technology generations," he said. "If the trajectories hold, we will continue to maintain a three year lead in process technology, even after our competitors deliver on their 10-nanometer plan."
New manufacturing process nodes are only part of the story. Renduchintala explained how Intel optimizes its manufacturing process within each technology generation to deliver performance gains with new products on an annual cadence.
As Intel invests for growth in an expanding market fueled by data, Intel CFO Bob Swan said the company will take a disciplined approach while delivering on its near-term commitments and placing a high priority on capital returns to shareholders.
Presentations from today's investor meeting are available on Intel's investor relations website.
Statements in this article that refer to forecast, future plans and expectations are forward-looking statements that involve a number of risks and uncertainties. Words such as "anticipates," "expects," "intends," "goals," "plans," "believes," "seeks," "estimates," "continues," "may," "will," "would," "should," "could," and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements that refer to or are based on projections, uncertain events or assumptions also identify forward-looking statements. Such statements are based on management's expectations as of February 9, 2017 and involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements. Important factors that could cause actual results to differ materially from the company's expectations are set in Intel's earnings release dated January 26, 2017, which is included as an exhibit to Intel's Form 8-K furnished to the SEC on such date. Additional information regarding these and other factors that could affect Intel's results is included in Intel's SEC filings, including the company's most recent reports on Forms 10-K and 10-Q. Copies of Intel's Form 10-K, 10-Q and 8-K reports may be obtained by visiting our Investor Relations website at www.intc.com/ or the SEC's website at www.sec.gov/.
1Source: 2016 Intel Revenue is based on Intel financials. 2016 Si TAM is based on amalgamation of analyst data and Intel analysis. PC and Server include CPU and Chipsets revenue
22021F Si TAM is based on amalgamation of analyst data and Intel analysis, based upon current expectations and available information and are subject to change without notice