Intel has confirmed the company’s plan to pull the plug on another non-core business: servers. The chipmaker is quitting the server-building business and will sell it off to MiTAC, a leading Taiwanese electronics manufacturer and parent company of Tyan.
Dell, HP, and Inspur are the juggernauts of the server market, while Intel is one of the smaller fish in the pond. The chipmaker has multiple facets, and one of them is — or rather, was — building server products. Intel has killed off a fair share of non-core businesses since CEO Pat Gelsinger took the reigns in 2021. Some of the more notable exits include Intel’s Optane business, SSD business, networking switch business, and the company’s more recent departure from 5G modems. Intel has a strong server product portfolio, but the chipmaker’s strongest suit is obviously selling silicon.
“In line with Intel’s continued efforts to prioritize investments in its IDM 2.0 strategy, we have made the difficult decision to exit our Data Center Solutions Group (DSG). As part of this plan, MiTAC, an edge-to-cloud IT solutions provider and longstanding ODM partner of DSG, will have the right to manufacture and sell products based on our designs. We are focused on ensuring the DSG team and its stakeholders are supported during this transition,” one Intel spokesperson told ServeTheHome (opens in new tab).
Intel has sold very few server units over the years — DSG hardly brought in significant revenue numbers for the company. So it doesn’t really come as a shock that the server-building business is the next head on the chopping block. Intel posted a net loss of $644 million in the Q4 FY2022, so this latest withdrawal from server-building is unlikely to be the last cost-cutting measure the company takes.
Intel recently launched the highly-anticipated 4th Generation Sapphire Rapids Xeon processors and some Sapphire Rapids-based servers. But now it looks like those may be the last Intel-built servers on the market — or perhaps the chipmaker is just white-boxing them for its partnering OEMs to rebadge. At any rate, Intel has transferred its server designs over to MiTAC. Tyan, a subsidiary of MiTAC, will definitely put those designs to good use.