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.

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A day before Intel’s Developer Forum kicked off in San Francisco, Intel (NASDAQ: INTC) officially unveiled the Xeon E5-2600 v3 known previously by its code name of Grantley.

On stage, Intel’s Diane Bryant, the company’s general manager of its Data Center Group, said that the “big data” economy was driving demand for a new series of Xeon Chips.

“The digital services economy imposes new requirements on the data center, requirements for automated, dynamic and scalable service delivery,” Bryant said on stage. “Our new Intel processors deliver unmatched performance, energy efficiency and security, as well as provide visibility into the hardware resources required to enable software defined infrastructure.

“We are continuing to be the most energy efficient processor on the planet,” she continued,” promising 27 world records in performance across the product line.”

“[Intel is] excited about the role this platform is going to play as we all collectively re-architect the datacentre from static to dynamic and from proprietary to open standards,” she later said on stage.

While the previous generation of Intel Xeon chips had a core count that went as high as 12, the third generation of Xeons offers up to 18 cores with clock speeds of up to 3.7 GHz . The Xeon E5-2600 v3 will also be the first in the series to support DDR4 RAM, which offers substantial clock speeds above DDR3’s JEDEC speeds as well as power savings due to lower operating voltages.

Another new feature of the Xeon E5-2600 v3 is the update of Intel’s Quickpath Interconnect (QPI) that’s capable of transferring data at 9.6 GTps, much faster than existing front side bus (FSB) technology.

To aid in the inquiry of fault detection, Intel is including a new range of telemetry sensors to give administrators more information and metrics on CPU usage, memory and I/O.

The new Xeon is available in 22 different versions that vary wildly depending on required clock speed and cores. Pricing begins at $213 and tops out at $2,072. For the workstation, the chip is available as the Xeon E5-1600 with pricing ranging from $295 to $1,723.

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This post originally appeared on Bright Side of News, VR World’s sister publication.

The Portland suburb of Hillsboro, where all Intel’s (NASDAQ: INTC) high end product operations – and its main cash cow – are located, was unusually hot for this time of the year, with temperatures almost touching 30 Celsius (90 Fahrenheit) some days.

So was Intel inside (pun intended), overheated in preparation for the imminent launch of new workstation, server and, yes, high-end desktop Haswell flavours that will have a public debut before the September IDF opens its doors. These were already well written about by many in the media community, so this time it’s pointless repeating what’s already widely known.

What is interesting is where Intel would go from here. Will the company focus on the Xeon and related enterprise and high end client products which do bring in the high-margins?  Or get embroiled deeper in the fight for the current fad of the day, the “all-popular but hard to make money” ultra-mobile gadgets?

The situation in the two markets can’t be more opposite: in the first, Intel’s Datacenter Group is an absolute industry leader, with the estimates of its market dominance hovering around, or above, 90% — of the highest-profit market in the general IT hardware space. After a bit of lull few years ago, the product launches are again on a yearly basis, keeping the tick-tock regular. Aside of increasingly hungry – perhaps vengeful – IBM with its global promotion of POWER8, there are no real global competitors in this space at the moment, performance-wise or presence-wise.

Intel as the underdog

On the other side, in the highest volume, but questionable margin, ultramobile space, with its plethora of smartphone and tablet offerings, Intel was, and still is, an underdog. Maybe it is in a worse position than AMD was versus Intel in the x86 space a decade ago, or that Alpha and MIPS were versus x86 fifteen years ago.

At least, during those respective times while trying hard to enter the main arena both of those competitors had their protected niche markets where they ruled — while it all lasted. In both cases, it was based on the combination of performance and feature advantages and customer base loyalty, at least for specific apps where Intel couldn’t match those competitors then.

Compare it to today’s ultramobile battlefield. Intel has sunk enormous resources, both financial and manhours, in getting into that almost totally ARM-dominated market. Over the past few years this seriously affected its balance sheet in the process. But Intel, like others, had its protected market: the high-end server side fund their low-end ultramobile peers. Yet, despite fairly good performance of its Atom-based mobile offering – in quite a few cases these measurably outperform their ARM competition – and huge investment in Android apps porting, the results are still only trickling in.

Lessons learned

Let’s go back in time to a period when Alpha and MIPS had even greater comparative performance advantage over the x86 in their respective heyday.

At the high end, that extra performance mattered much more than in a smartphone, whose primary functions should, after all, be calling and texting. But the companies behind them, while not small by any means, still couldn’t handle Intel marketing competition and lack of will by other partner vendors to fully support them. So, at least outside China, they failed.

Now, Intel faces a “central committee” of all-powerful global vendors like Samsung, Huawei, Nvidia, Apple, LG and, of course, Qualcomm, all working with the little ARM Plc, to push ARM forward.

Now ARM is hardly the best architecture around. In fact, if you really wanted to find something worse in performance, architecture and scaling than the x86, ARM and SPARC are the only real candidates, aside of the “good ship Itanic.” An architecture originally designed for a low-end desktop PC (see: BBC Micro) and embedded apps, never for high-performance computing, can in reality only stay within the ultramobile space unless major, major changes are made – which impact the now “golden” compatibility with the past apps.

After all, it took ARM nearly 30 years – from 1985 “Acorn RISC Machine” to 2014 Cortex-A57 – to have a proper 64-bit processor, while MIPS and Alpha were fully 64-bit in 1990 and 1991, respectively. Even the x86 has now over a decade of 64-bit existence.

And yes, those ARM alliance vendors fight each other like nobody’s business every day – they are each other’s worst enemy. However, Intel’s entry would unite them all against a “common enemy” who should not be allowed a chance at the dominance, at least not the way it has in the PC world.

Does Intel need an exit strategy?

Even with shareholder pressure of the “my daughter’s iPad doesn’t have Intel Inside: fix it or you’re fired!” sort, the question is how deep Intel should go into the smartphone and tablet quagmire?

Something like FullHD to UHD 2-in-1 running on Broadwell ULV does make sense, as it is essentially a PC Ultrabook with a Tablet mode or vice-versa. Windows is still more of a productivity platform than Android, so there would be a definite differentiation.

However, the mainstream ultramobile battlefield, with cut-throat prices for both SoC chips and the end products, may not be the best thing for Intel to enter. Perhaps a reasonable goal of creating and maintaining a 10% market presence in the smartphone and tablet field, not unlike that of Apple in the desktop and laptop space, would fit the best. It would be big enough to create a nice unique-value

niche and have most of the apps running native, but it would not be seen as a major threat to the ARM side, and other things would basically continue as usual.

However, on the high end, where those same ARM vendors are drooling after Intel’s high margin, four digit priced chippery, Intel has to stay resolute and, by accelerating the product launches and keeping the huge performance delta, show to those vendors that it will take forever and a day for them to catch up. Broadwell EP should not be delayed from the yearly refresh cycle, and neither should its Skylake follow-on. The profitable enterprise SSD, networking and interconnect programs are there as well, and they should move forward at the same rapid pace.

If there’s a way to justify even higher per-socket chip prices for even more powerful CPUs for even denser datacenters – where power and space are a constraint – then maybe there is a fresh way forward.

How about looking back at those previous non-x86 RISC architectures that still leave ARM in the dust as a way forward for Intel, while using the existing socket and chip infrastructure? After all, x86 being x86, there seems to be some sort of practical ceiling – somewhere around $5,000 per socket in Xeon E7 series – that the market is willing to accept.

This is still only about one-third of what IBM can get away with its top end POWER8 offerings, not to mention its ultrafast, hugely pricey MCM flavours. What if we had a much faster complementary RISC, yet Xeon E7 socket-compatible solution that provides enough extra performance, footprint and feature benefit that the users are willing to pay $10,000 per socket for it?

Especially if much higher instructions per cycle per core could be achieved even in usual apps compared to the x86? The Chinese “Shenwei” Alpha program, leading to a fairly compact 100 PFlop machine in about a year’s time, could – maybe – be the right hint. And yes, it already leaves ARM in the dust.

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As more and more X99 motherboards leak, it only made sense to release a portion of the trove of boards that haven’t already been announced or leaked.

The Asus X99-E WS, a Bright Side of News* exclusive, is a particularly interesting one because it is Asus’ (TPE:2357) latest high performance motherboard for workstation users. Because X99 is an entirely new platform there are very likely going to be a lot of people searching for new workstation boards like the X99-E WS to upgrade their workstations.

In terms of features, you get all the expected things like Haswell-E support, a plethora of PCIe 3.0 slots, which includes support for 4-way CrossFireX and SLI with X16 links. This board is specifically designed to support both Core i7 and Xeon E5 class chips (including the E5-1600, thanks to retailer leaks) thanks to being only a single socket workstation board. Because this is a workstation board, ASUS also talks about the boards overall power efficiency focusing on their Dr. MOS, 12k hour capacitors, ProCool power connector and beat thermal choke.

The Asus X99-E WS also has a Q-code logger and Dr. Power, even though it also has a plethora of connectivity which make it all the more attractive. That includes dual Gigabit NICs, a whopping 10 USB 3.0 connectors on the rear IO alone, not to mention the standard audio connectors, eSATA and the expected IO. You will get the full 8-slot DDR4 configuration, which is to be expected even though you very likely won’t get much memory overclocking support like the Rampage series of boards.

Asus X99-E WS IO

In addition to all of this, you will be getting backed by an Asus 3 year warranty which brings the MSRP price of this board to a whopping $519. Yes, this is a fairly high price for a single socketed board that isn’t an overclocking board, but X99 is a performance platform and this is a workstation board which should mean you are paying for higher quality components and reliability.

In fact, some retailers already have it available for pre-order but don’t really have any details or pictures of the board. So, you can already get it for $499 via some retailers, already lower than the $519 MSRP.

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Today, Intel made two fairly large announcements simultaneously with the announcement of their Omni Scale Fabric and the integration of it into their next generation of Xeon Phi chips. Additionally, Intel has worked with Micron to enhance Knight’s Landing with high-performance on-package memory. This on-package memory is also known as Hybrid Memory Cube or HMC.

The Knight’s Landing next generation Xeon Phi product announced today will use Intel’s Silvermont CPU architecture which is modified (or as Intel says, enhanced) for HPC. The expectation that Intel is setting is that these cores will deliver three times the single threaded performance of the previous generation and still be Intel Xeon Binary compatible.

Knight’s Landing – MCDRAM

As for the on-package memory itself, the HMC, it will support up to 16GB at launch while only taking up 1/3 the space (compared to Knight’s Landing vs Knight’s Corner) compared to GDDR5. They are also claiming five times the bandwidth compared to DDR4 using the same amount of memory. However, to be fair, this 5x bandwidth comparison versus DDR4 isn’t necessarily a fair one since DDR4 is still in its infancy and a more appropriate comparison would be DDR5 since DDR3 in servers is fairly slow. Intel and Micron are also claiming 5x the power efficiency when compared to GDDR5, based upon comparisons between Knight’s Landing and Knight’s Corner (the previous generation). But do keep in mind that Micron says they will only be shipping 2GB and 4GB parts this year, making the 16GB parts for Knight’s Landing 2015 parts.

Knight’s Landing – MCDRAM

The Omni Scale Fabric from Intel is designed to deliver maximum bandwidth and scalability between Intel’s future Xeon and Xeon Phi products. With interoperability between Knight’s Landing and Xeon processors coming with the 14nm generation of Xeon server processors. This Omni Scale Fabric will have PCIe adapaters, edge switches, director systems, Intel’s own silicon photonics and open software tools. All of these are designed to make the upgrade to Intel’s Omni Scale Fabric less painful.

Omni Scale Fabric

In terms of performance, Knight’s Landing will deliver “3 TFLOPS of peak theoretical double-precision performance” which is based on preliminary and “expectaionts of cores, clock frequency and floating point operations per cycle.” Which really means that this hasn’t really been benchmarked exactly quite yet and we will have to see what the end product delivers when Intel actually starts shipping commercial systems in the second half of 2015.

There is also already an operational supercomputer using Knight’s Landing in their system and that’s NERSC’s Cori supercomputer which already employs Knight’s Landing and has already benchmarked the performance at over 3 TFLOPs per Knight’s Landing node.

NERSC

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Afore mentioned three models are almost identical to already existing Core i7 920, 940 and 965, but for the QPI inteface, which is allegidly set at 5.4 GT/s on all parts. G Also, very interesting part is the similarity in names between Core and Xeon series, something we haven’t seen recently. 2.66GHz Nehalem corresponds to the name Core i7 920 and Xeon 3520, i7 940 is Xeon 3540, while the 3.2 GHz part is known as Core i7 965 and Xeon 3570. We estimate this small change in number is due to QPI link.

We all saw the execellent scores that appeared in legally leaked benchmark results on several sites on the ‘Net. Thus, AMD’s Shanghai should better brace for impact, because Nehalem is coming from high altitude.

This also practically confirms the rumors of faster Core i7 Extreme processor, since Intel had the tradition of launching higher-clocked desktop part as soon as server parts reach the clocks of desktop versions (at least, up to Core 2 Quad era).

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Break point is achieved - it's all downhill for 65nm from now on

While the world is waiting on AMD’s Shanghai and Deneb, Intel’s 45nm Core and Xeon processors overtook 65nm ones and the company decided to phase out or EOL (End Of Life) no less than 31 different 65nm processors.
Intel claims the company has achieved break point between 45nm and 65 and that majority (roughly 60%) of CPUs in Q4 will be manufactured using 45nm process.
Given that processors like Core 2 Duo E8500 overclock to 4-4.2 GHz using tiny stock cooler, there is clear headroom for next-generation of its CPUs, codenamed Nehalem. I had the opportunity to test the Nehalem setup and all that I can say is 45nm process and Intel engineers rock. To have stable 4 GHz+ operations on air was something I could not even dream of at the time of NetBust CPUs.
But the tides have turned, and now Intel’s 45nm processors are the way to go for full performance. You can read more about phased out processors at my ex-post, TG Daily.

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