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Intel's Big Server Chip Launch Will Help It Fend Off AMD

Over the last two years, Intel Corp. (INTC) has frequently stressed that growing the sales of its massive Data Center Group (DCG) is a top priority, and that it will make big R&D and manufacturing investments in support of this goal. With its latest chip launches, Intel went a long way towards backing up its talk.

On Tuesday, July 11th, Intel officially launched its much-anticipated Xeon Scalable server CPU line, formerly codenamed Purley. The chips are based on Intel's Skylake CPU architecture, which first appeared in the PC market in 2015, and are meant to replace two CPU lines, respectively codenamed Brickland and Grantley, based on the older Broadwell architecture.

Though Intel hasn't touched on it much today, the company is significantly overhauling how it segments and brands Xeon chips with its Skylake refresh. It previously placed Xeons into its E3, E5 and E7 product families. E3 chips generally went into small single-CPU servers; E5 chips (the most popular) went into 2 and 4-CPU servers; and E7 chips went into "mission-critical" enterprise servers featuring 4, 8 or more CPUs.

Going forward, Xeon chips will be placed within 4 metal-themed families -- Platinum, Gold, Silver and Bronze -- that differ in terms of performance and features, rather than server size. As a result, Intel can be more flexible in terms of the features it can provide for a given type of server -- for example, cloud giants prone that have been deploying thousands of 2-CPU E5 servers can now access features that were reserved for giant E7 servers.

Though performance gains vary a lot based on CPU and workload, Intel claims that the average gain relative to Broadwell Xeon CPUs is around 65% -- the largest generational improvement in a decade. As evidence, Intel trotted out an impressive slide showing how the likes of IBM Corp. (INTC) , Baidu Inc. (BIDU) , SAP SE (SAP) and Tencent are seeing gains in the 50% to 100% range for cloud, AI, analytics and...