Just as Intel’s (NASDAQ: INTC) CEO Brian Krzanich opens the regular staff meetings before a dramatically reduced IDF2015 Shenzhen conference, it is a good time to review how government and enterprises don’t see eye to eye when it comes to strategic business.

China’s Tianhe-2 supercomputer is world’s fastest supercomputer, at 33 PFLOPS demonstrated and 55 PFLOPS theoretical performance.

Remember the Tianhe-2 machine at Guangzhou Supercomputer Center, the current World’s number one according to Top 500 Supercomputer list? Unlike some other China supercomputers – Tianhe-2 is fully Intel based machine,  the world’s largest assembly of Intel Xeon CPUs and Xeon Phi accelerators.

Even after Intel ‘opened the kimono’ and gave a nearly 70%  discount on its processors and accelerators, it has given Intel, and therefore US technology sector a major foothold in China and Asian region as such. Over the course of past two years, we were involved in a lot of discussions with Intel staff who were not privy to see the financial impact of the deal — and even argued our undoubtedly solid information. We’re not here to report how things should be, or are in marketing and investor presentations to its numerous staff, but how things really are.

During 2015, the Tianhe-2 supercomputer was supposed to be doubled in its size, up to 110 PFLOPs peak, again using the very same Intel processors and accelerators. Since now these are mature products with lower real manufacturing cost for Intel, they could finally make some real money.

Well, it was not to be: our tweety bird from the window chirped to us that Uncle Sam has put this supercomputer centre, together with National University of Defense Technology in Changsha, the system’s creators, and Tianjin centre, among others, on so a so-called “Denial List”, which prevents any high technology from the USA to be sold to these sites. Our sources used even harsher words.

Knowing that these several sites alone are expected to order some 250+ PFLOPS of compute in the next few years (around 500,000 top-end Broadwell-EP Xeon E5v4 processors, or  approximately $1 billion high margin list price) and they were THE Intel friendly ones, this is quite a loss to Intel, thanks to Uncle Sam.

But, what’s worse strategic loss in time is that, based on this decision as an excuse, indigenous China high end processor architectures can now push the government to gradually remove any dependence on US. This means just one thing: an AMD or Intel x86 processor technology is increasingly becoming errata non grata. Should the Chinese government react in force, it will give the Chinese vendors the blank check support to go all the way a developing their Alpha, POWER and MIPS processors for both the government and the mainstream commercial use.

You may think they are not up to the mark, but remember how fast British ARM architecture became the dominant processing architecture in the world. And this group doesn’t need to worry about the antiquated x86 ISA, worry about satisfying the dumbed down shareholder masses, or overpaying their marketing and sales staff, as well as the fat check, golden parachute-protected CxOs.

They have taken the best that the USA has developed (some of key Alpha, GPGPU and MIPS architects left US over the course of past four years, a lot of them due to non-renewed visas) and discarded due to corporate shenanigans, and the continued developing it much farther than anyone expected both on hardware and software side.

Five years ago, ShenWei showed a CPU that performed faster than the fastest GPUs of the time. Now, fifth generation is approaching, slotting between Tesla and FirePro GPGPUs and next-gen Xeon Phi accelerators. However, this is not an accelerator or a GPGPU – this is a CPU.

So, thanks to Uncle Sam, China might not have a 110 PFLOPS Intel based supercomputer but it definitely will launch a 100 PFLOPS system based on upcoming 64-core, TFLOPS-class ShenWei Alpha, with true blue CPUs possibly faster per socket then even the next generation Xeon Phi or Volta/Pascal-based Teslas.  Next, of course 100 PFLOPS Chinese POWER8 or 9 — (thank you IBM) and then possibly even Loongson MIPS – -it may come back into the high end field with renewed government support because of this Uncle Sam move. All are clean, elegant, scalable high end RISC architectures.

So who are the winners and losers from this?

NUDT and Tianhe may be the losers for now, but only short term. They will simply speed up their HPC ARM plan.

Intel comes out the big loser from this and a lot: who will want to do a phased deployment large x86 machine in China now, and worry about future phases? Then comes Uncle Sam himself: they lost even that little bit of influence on the high end China HPC. How is that for “cutting your nose to spite your face?”.

VR WORLD’s  Analysis: US government moves accelerate the Chinese CPU roadmap while curtailing juiciest sales for Intel and other US vendors.

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Today, Intel (NASDAQ:INTC) reported its earnings for the third quarter of 2014.

Intel’s expected consensus earnings were $0.65 per share, while the company reported an EPS of $0.66  on record $14.6 billion  in revenue. As a whole Intel reported $3.3 billion in profit on $14.6 billion in revenue. It also generated approximately $5.7 billion in cash from operations and paid back $1.1 billion in the form of dividends to investors for the quarter while using $4.2 billion to repurchase 122 million shares of stock. This is very likely thanks to the strength of the PC market recently in North America and Europe. Intel’s earnings for the quarter were up nearly 20% quarter over quarter and their revenue was up 5% quarter over quarter. When you look at the same time a year ago, Intel’s profit was up 12% and revenue was up 8%.

For Intel’s business divisions, Intel once again saw a mixed bag of results. Its PC Client Group saw revenue grow to $9.2 billion, up 6% sequentially and 9% year over year. Its Data Center Group also saw sizable improvement, growing to $3.7 billion from growth of 5% sequentially and 16% year over year (showing Intel’s renewed server growth). The IoT Group saw revenue of $530 million, down 2% sequentially and up 14% year over year. As far as the mobile efforts go, its Mobile and Communications group saw revenues of only $1 million, consistent with Intel’s expectations. Lastly, software and services operating group also saw revenues of $558 million, up 2% year over year and sequentially.

What will it take for Intel to compete in mobile?

Intel is still struggling to compete in the mobile space, continuing to take heavy losses of over $1 billion (now at $3 billion this year alone) and having very few design wins to show for. It’s very likely going to consider their upcoming Broadwell chips as part of their mobile push, but the truth is that those chips are still going into laptops and high-end tablets rather than smartphones and affordable tablets where the real volumes lie. The new Core M processors are showing some serious promise, but they are still too expensive to put into a smartphone or tablet even though their power consumption is impressively low thanks to the new 14nm process. But they still need to find a way to make themselves relevant in smartphones and tablets, especially when you consider how much money they’re spending to keep that division going.

There is one seriously troubling business metric here that Intel is clearly trying to hide. That’s the Mobile and Communications Group. It reported a minuscule $1 million in revenue for a division that last quarter reported $51 million in revenue, that’s a reduction of around 98% quarter over quarter. And when you look at 2Q 2014 against the previous quarter (1Q 2014) their Mobile and Communications Group was already down 67 percent sequentially and down 83 percent year-over-year. What’s even crazier is that if you look at the Mobile and Communications Group revenues for the 1Q 2014, the company was already having a hard time while earning $156 million in revenue. During 1Q 2014, Intel reported $156 million in revenue which was already down 52% sequentially and down 61% year over year. Intel has successfully eviscerated their entire mobile division to effectively nothing, Investors are absolutely going to demand that Intel abandon their mobile push because it clearly isn’t working and its costing the company billions of dollars per year to run, essentially, into the ground.

Intel also recently announced its new Core i7 5960X along with a full line of Haswell-E based performance processors for the X99 motherboard platform, which now uses DDR4 instead of DDR3. However, this launch came at the tail end of 3Q 2014, and very likely won’t affect Intel’s sales as much as it will in 4Q 2013. It also launched the accompanying Xeon E5 v3 family of server processors, also based on Haswell-E and also running DDR4 shortly after the announcement of the Intel Core i7 Extreme processor. Both lines bring valuable advancements to Intel’s own server and high performance desktop lines, where the company is strongest.

Intel also guided for the 4Q of 2014, stating that it expects to once again have record revenues to the tune of $14.7 billion, plus or minus $500 million and that they expect gross margin to go down to 64% from 65%. They expect R&D to increase a bit from $4.8 billion to $4.9 billion, even though the previous quarter was $4.9 billion, so it isn’t really much of a change.
Q4 2014. Intel was trading up 2% during regular hours and is now trading up around 2% in after hours trading.

The post Intel Beats Estimates, Reports Strong Q3 2014 Earnings appeared first on VR World.

Microprocessors are Costa Rica’s primary export according to their Foreign Trade Ministry. The country was building a name for itself as a tech center in Central America. Intel just put a damper on those plans. The influential company is closing their microchip assembly and testing operations leaving 1,500 locals unemployed.

Intel previously touted their contributions to their Central American host country. They indicated that the company participated in social responsibility projects in the community, focusing on education and the environment. Earlier, Intel proudly proclaimed: “While Costa Rica has historically been known for exporting coffee beans and bananas, thanks to Intel’s investment there, those traditional exports have been surpassed by circuits and computer chips.”

Sadly for Costa Rica, Intel just forfeited those accomplishments.

The video above shows that Intel invested heavily in San Jose, Costa Rica facilities, creating an packaging line, all Intel’s Ultra Park and many more facilities.

Those manufacturing jobs will be moved to Asia after 15 years on Costa Rican soil. However, La Nacion reports that the company’s offices in Belen free trade zone in Heredia will continue to employ 1,200 workers in the Engineering and Design departments.

When rumors began to circulate about the plant closure, Luis Guillermo Solis, a politician running for President said: “We want Costa Rica to be a country friendly to foreign investment.” He based his pronouncement on the quality of the workforce, and good conditions for investment including stability of the economic policies of the country.
Juan Ramón Rivera, president of the Costa Rican Chamber of Industries, agreed that their country has a lot to offer tech companies. “We believe our country continues to offer interesting conditions for the development of the industrial sector. We deeply regret the decision they [Intel] were forced to make.

However, in 2010 when Costa Rica was proposing a taxation of free-trade zone businesses, Michael Forrest, Intel Costa Rica’s general manager, indicated that Intel decided against a large investment in the country due to uncertain fiscal policies. Now, Intel who has been trying to regain ground in the industry said: “The best long-term solution to maximize global operational efficiency and effectiveness is to close its assembly and testing operations in Costa Rica.”

Costa Rica is not being singled out. In the last six months, employees in the US have been affected by layoffs in Massachusetts, Arizona, and Oregon. Malaysia and Spain have felt the pain as well. Only time will tell if Intel’s planned move will provide a more profitable and stable economic environment.

Does this has anything to do with Intel’s decision to expand the R&D Center in Malaysia, which developed a good portion of Haswell microarchitecture, or the recently announced R&D Centers in Shenzhen, China – remains to be seen.

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