Analysts from Baird Equity Research attended the Linley Tech Data Center Conference last week. Their key takeaways below:
Intel Corporation (NASDAQ:INTC) is well positioned to maintain its market share in servers, and has upcoming architectures (notably Avoton) to address network and I/O specific applications where ARM-based architectures could gain some traction starting in 2014. 10GbE ramp is expected to significantly accelerate this year, nowtarting its mainstream ramp phase.
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Intel Corporation (NASDAQ:INTC) is well positioned to protect its market share in servers, in their opinion.
– Microsoft’s architecture cannot be used on non-x86 server architectures.
– ARM-based architectures feature lower performance per thread versus Intel’s Xeon.
Opportunities for non-x86 architectures in servers remain limited, the analysts believe. Network and I/O-specific applications offer opportunities for ARM-based architectures starting 2014. Cloud, social media require different processor characteristics, with response time/number of transactions becoming the new criteria:
I/O becomes the biggest bottleneck. ARM offers lower performance than Xeon, but enables higher server density, offers high power efficiency (majority of servers’ operating cost is electricity), and the flexibility to target specific workloads.
– 64-bit ARM architectures are coming in 2014: Applied Micro’s X-Gene, Cavium’s Thunder, Calxeda Lago, and AMD Opteron.
Intel Corporation (NASDAQ:INTC)’s response/upcoming product roadmap:
– Xeon is now starting at 17W (22nm)
– Intel’s Centerton: first Atom-based (32nm) server processor. TDP: 6.3W at 1.56GHz
– Intel’s Avoton: TriGate/22nm-based, new microarchitecture, expected to cut power by 30%. The Linley Group expects Avoton will ramp in production in 2H13, and a 14nm-based Xeon architecture in 2014.
10GbE Ramp Is Expected to Significantly Accelerate This Year, with the start of mainstream adoption driven by data centers (high volume, cost sensitive, multi-vendor equipments phase).
– 90% of stand-alone servers are still connected today via 1GE connections.
– Industry participants are seeing a “hockey stick” curve starting this year following the launch of Romley in 1Q12.
– 10GbE switching/controller forecast: 39M in 2013 (from 26M in 2012), 55M in 2014, 71M in 2015 (per the Linley Group’s presentation).
– Drivers: 30%+ CAGR Internet traffic growth, 80% 5-year CAGR mobile data traffic, I/O bottlenecks, Xeon processor pushing 20-40Gbits/s of bandwidth (Romley rollout supports 10GbE natice server interconnect).
– The initial start of 40G/100G in large aggregation switches in data centers is expected in 2014.
Broadcom Corporation (NASDAQ:BRCM) is well positioned to benefit from an acceleration in 10GE deployments, within our semiconductor coverage list. The analysts reiterate their outperform rating on Intel Corporation (NASDAQ:INTC) and BRCM shares.