AMD and Nvidia are reportedly venturing into the development of Arm-based processors for client PCs, which will inevitably bring additional competitive pressure for Intel. However, Intel CEO Pat Gelsinger expressed limited concern over the potential impact of these new processors on Intel's dominant market position. Meanwhile, even if Arm-based CPUs succeed, this could be an opportunity for the company's Intel Foundry Service (IFS) unit.
"Arm and Windows client alternatives, generally, they have been relegated to pretty insignificant roles in the PC business," Gelsinger told analysts and investors at the company's earnings conference (via SeekingAlpha ).
The potential introduction of Arm-based chips by Nvidia and AMD is a direct challenge to Intel's stronghold in the PC CPU market. Apple's M-series SoCs for Macs demonstrated very competitive performance efficiency, increasing its market share significantly. They have also shown some great potential for PCs. Meanwhile, Gelsinger draws confidence from historical data, where Arm and Windows clients have typically held marginal positions in the PC industry. For example, Qualcomm has failed to grab any significant market share with its Windows-compatible Snapdragon SoCs in recent years.
"We take all competition seriously," Gelsinger said. "But I think history as our guide here, we do not see these potentially being all that significant overall. Our momentum is strong. We have a strong roadmap."
With PC-oriented SoCs coming from AMD, Nvidia, MediaTek, and Qualcomm, there will be multiple offerings targeting different market segments, which could force Intel to bring more innovations to the PC sector. However, the advantage of Arm — the availability of different SoCs from different makers — could be its biggest drawback too as they might not offer a consistent experience.
Intel made a big bet on its AI accelerator which is now supported by over 100 independent software developers (ISVs). These AI enhancements will be coming from different software makers offering consistent experience on tens of millions of Meteor Lake, Arrow Lake, and Panther Lake-based computers. Intel may well be right about the lack of at least an immediate threat from Arm-based SoCs for PCs.
Looking ahead, Gelsinger sees a silver lining in the advent of Arm-based processors. He believes that the proliferation of Arm-based chips by other manufacturers could inadvertently spur growth in Intel's foundry business, turning potential competition into an unexpected avenue for expansion and revenue generation.
