Intel: Intel Shifts Focus to High-Margin Businesses, Exits Prebuilt Server System Market with MiTAC Sale

Intel has announced that it will be exiting the prebuilt server system business due to its low-margin profitability. The Data Center Solutions Group (DSG) will be sold to MiTAC, an edge-to-cloud IT solutions provider and a long-standing ODM partner of DSG. MiTAC will have the right to manufacture and sell products based on Intel's designs. Most of Intel DSG servers were sold outside of the U.S., particularly in South America. While the company did not have a broad lineup of server systems, it did offer machines based on its unique Xeon Platinum 9200-series CPUs for heavy-duty and high-performance computing applications as well as systems with GPU and accelerator support.

It appears that Intel has been winding down its server business for several quarters. The company has ceased to push its Data Center Blocks and Data Center Systems systems, yet kept offering them. It also supplied QCT's Sapphire Rapids-based machines for evaluation to specialized press. Meanwhile, Intel does have its own Sapphire Rapids-based server machines. This move is part of a broader effort by Intel to focus on fewer core businesses where the company has more control and ideally greater profitability. Exiting the server system business is not surprising, as it is a highly competitive business with limited margins compared to the individual components Intel provides. Intel's DSG offerings should fit nicely into MiTAC's lineup of products. The ODM, which is also the parent company of Tyan, has a much larger share of the server market and multiple brands under which they can sell these systems.