Intel ‘the main loser’ of Sapphire Rapids’ lower demand, says Ming-Chi Kuo

Analyst Ming-Chi Kuo said via Twitter that Intel (INTC) is "the main loser" of Sapphire Rapids’ lower-than-expected demand and Microsoft’s (MSFT) significant reduction in Sapphire Rapids server orders due to weak server market demand. The analyst’s research indicates that Intel’s Sapphire Rapids is expected to start mass shipments in 2Q23, and investors expect this new server chip to contribute significantly to Intel’s profits, but the supply chain was recently told to cut Sapphire Rapids chip orders for 2Q23 by around 50% due to weak demand in the server market. Microsoft, one of Sapphire Rapids’ major CSP customers, recently informed the supply chain about revising downward Sapphire Rapids server orders for 2H23 by about 50%-70% and after that due to weak server market demand. Intel is facing competition from ARM chips besides competing with AMD (AMD) in the server market, the analyst adds, noting that Microsoft will likely start buying ARM server chips produced by Ampere from 1H24, which will gradually reduce its dependence on x86 and be detrimental to Intel’s server business. Reference Link