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Intel (INTC) Unveils Latest A.I. Chip, Springhill: Key Takeaways

Zacks Equity Research

Intel INTC recently divulged details on its new 10 nanometer technology based AI processor, Springhill. The chip-making giant showcased the latest processor for the first time at the Hot Chips Conference, Silicon Valley, CA.

At CES 2019, Intel had revealed that it is working on an AI-based inference chip, Springhill or Nervana NNP-I (Neural Network Processor for Inference). Per Intel, Facebook FB, one of the development partners in the project, has already begun utilizing the latest chip.

The chip will help companies having higher workloads with accelerated inference. According to Intel’s statement, as revealed by an Israel daily, the latest inference-capable chip “can handle as many as 3,600 images per second at 10 watts of power.”

Into the Headlines

The new AI chip is being developed at Intel’s Haifa facility in Israel. The latest development highlights Intel’s ongoing AI investments in Israel-based startups like NeuroBlade, Habana Labs, among others. Per Reuters, Intel Capital’s investments on Israel startups came in at approximately $120 million in 2018.

The latest inference chip is aimed at large computing centers to address the demand for high-performance and power efficiency capabilities to effectively accelerate and support complex data processes.


Coming to the price performance, shares of Intel have gained 3% in the past year, against the industry’s decline of 7.8%.

Major Takeaways

Hardware Supporting AI Workloads Coming Mainstream

Intel expects the new chip to aid its Xeon processors in big companies involving larger computing centers to handle more complex workloads. Higher adoption of Intel’s AI chip is anticipated to result in intelligent systems with higher accuracy and faster response times.

With the latest announcement, Intel has upped its game in the AI trained inference server chip market.

AI techniques like machine learning, deep learning and natural language processing (NLP) are rapidly changing business dynamics. AI essentially refers to the concept of machines and virtual programs that can replicate human mannerisms, such as speech recognition, visual processing and so on.

Rapid proliferation of AI into hardware system is coming mainstream as secular growth in data calls for effective systems to support processing of workloads. Moreover, development of inference-enabled chips is anticipated to aid Intel boost its self-driving initiatives and register new deal wins from Mobileye.

Per latest IDC data, worldwide spending on AI systems is envisioned to be $35.8 billion in 2019, up 44% over 2018. The research firm expects the tally to hit $79.2 billion at a CAGR of 38% between 2018 and 2022. This favors Intel’s increasing focus on delivering efficient solutions to intelligently handle workloads and improve performance.

Intense Competition Remains a Concern

NVIDIA NVDA is a dominant player in the AI processor domain with its Jetson TX2 inference chips and innovative AI platforms. Moreover, NVIDIA’s recent Mellanox acquisition is likely to provide the company an edge in the high performance computing (HPC) vertical. Further, NVIDIA’s strengthening portfolio catering to self-driving vehicles poses threat to Intel’s ongoing initiatives to bolster Mobileye deal wins.

Moreover, presence of Xilinx XLNX in this space can’t be ignored. Xilinx’s strength in its Versal chips integrated with AI inference capabilities remains a concern for Intel.

Nonetheless, competition bodes well for overall industry as players come up with innovative solutions to enhance business opportunities. Pricing parameters and broader availability of Intel’s latest chip are anticipated to rev up the inference chip market.

Zacks Rank

Currently, Intel carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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