Intel (NASDAQ:INTC) recently unveiled plans to commercialize its Many Integrated Core (MIC) architecture in the high-performance computing space -- dedicated supercomputers primarily used by governments and research facilities. The announcement came at the International Supercomputing Conference, where Kirk Saugen, a vice president and general manager of the Data Center Group, outlined goals to reach exaflop (quintillion computer operations per second) performance by the end of the decade, more than 100 times faster than today's top machines.
MIC is an offspring of Intel's failed Larrabee GPU initiative, an ambitious hybrid software/hardware graphics processing unit retired in late 2009. The silicon developed as part of that project is now a multi-core math co-processor well suited for demanding floating point tasks.
Intel plans to position future offerings in direct competition to Nvidia's (NASDAQ:NVDA) Tesla line of chips, threatening its growth prospects in a world where Nvidia's core business, dedicated graphics, os slowly but steadily being eroded by integrated graphics (IGP units) like Intel's own Sandy Bridge and AMD's (NASDAQ:AMD) Llano platforms.
In addition to highly parallel design which scales well with size, Intel emphasizes ease of porting for prospective adopters, since the MIC architecture can be accurately described as a bunch of small x86 cores packed on a single ring bus. This means programmers can easily design or re-design applications instead of migrating to Nvidia's powerful but proprietary CUDA programming platform.
A late 2012-2013 timeline was given for commercially-available designs.
Intel's Data Center Group was responsible for only 20% of the company's total revenue for FY2010 but posted a stunning 88% gross margin vs. 76% company gross margin (Source: Intel's FY2010 report.)
In my article recommending Intel as a dividend champion, I mentioned that part of its enormous strength is the ability to leverage research and superior manufacturing capabilities to continually expand its portfolio of products both in the highly profitable enterprise segment as well in the consumer space. The MIC architecture points to Intels' ability to gain even from nominally failed research, as with the now-defunct Larrabee project. Between its Xeon line of chips, superior 22 nm foundry processes and newly announced 3D transistor technology, Intel appears well-poised in the growing data center space.
Today's launch serves as a reminder that although it doesn't have anything competing directly against ARM's (NASDAQ:ARMH) mobility-oriented architecture, Intel's R&D is quite formidable. While already an enormous profitable company which rewards its stakeholders through friendly dividend and share buyback policies, Intel is also positioning itself for future growth.