In the last three months, Intel’s Accelerated Computer Systems and Graphics group (AXG), responsible for its Alchemist graphics cards, has seen a loss of $507 million. This is a significant increase on the $168 million it lost in Q1, 2021.
Intel explained that a large portion of this cash is held in “inventory reserve and roadmap investments.” Alchemist has yet to be released outside China. According to Moore’s Law Is Dead leaks, the release may be delayed even further. However, inventory is growing and is ready for release.
This is normal for significant product launches. However, it coincided with one of the worst financial reports by Intel in many years. Revenue for the company was $15.3B. This is 17% less than last year and $2.7B lower than expected.
An alchemist would not have done much to fill that gap, but a timely release might have made Intel’s massive push into graphics seem much more worthwhile to shareholders.
CEO Pat Gelsinger stated that the sudden and rapid fall in economic activity was the main driver, but Q2 also reflected the execution problems in areas such as product design, DCAI, and the ramping of AXG offerings. (via Seeking Alpha).
Intel has to lower its expectations regarding AXG and stated that it “will not hit our GPU unit goal.”
He also explains why Intel was unable to deliver Alchemist on time. He says, “COVID-related supply chains issues and our software readiness challenges caused delays in availability that we are still working to overcome.”
However, there is good news. It’s not just that AXG’s losses compared to Meta’s Reality Labs division make AXG seem small fry.
“We will bring in over $1 billion this year. We started ramping up Intel Arc graphics for laptops (and OEMs), including Samsung, Lenovo, and Acer. Gelsinger states that Intel Arc A5 and A7 desktop cards will begin shipping in Q3.
But it is quite another to know what condition these cards will be in when they release.
These software-readiness issues are common themes in the Intel Alchemist A380 GPU reviews available in China today. Computer Base Wolfgang Andermahr reviewed the card. He said the drivers were “currently so bad that it is difficult to believe that Intel can raise the quality to a useable level within the next few months.”
It is a shame that Intel’s graphics efforts have not come at the right time for the chipmaker giant. It would be tragic to see Alchemist and its successors Battlemage Celestial and Druid, affected by more headwinds at Intel. It would be excellent for everyone to have another player in the graphics cards market. If not Intel, who?
