At a recent investor conference, the CFO of chip giant Intel (NASDAQ:INTC) offered up some perspective about the company's long-term growth prospects. 

Intel operates in many different segments, but the company has made it clear over the past year or so that it expects its data-center group (DCG) to be its primary growth driver in the years ahead. DCG makes most of its money selling processors and other related components into the server market, which includes chips for both enterprise and cloud servers. 

A wafer of Intel processors.

Image source: Intel.

The company commands the lion's share of the server processor market, with share that's believed to be somewhere north of 90%. The sense that I got from reading comments from Intel VP and CFO Robert Swan at the Credit Suisse 21st Annual Technology, Media, and Telecom Conference is that the company expects to see its share of this market erode, perhaps substantially, in the years ahead. 

The evidence

Swan spent some time going over Intel's change in how it fundamentally views its position in the data center. 

"The cultural transformation is, we no longer talk about [Intel] as having 90%-plus market share in a smaller market where, in that world, there's nowhere to go but down," he said. For good measure, he conceded that the company would be facing "increasing competitive dynamics" in the data center. 

It's quite remarkable to hear an Intel executive use the phrase "nowhere to go but down," which comes off as an implicit acknowledgement that the company's current market share isn't sustainable. 

Indeed, instead of viewing itself as an overwhelmingly dominant player in the server processor market, Intel now apparently views itself as a "30% share player" in a broader market that includes not only server processors but other products such as memory, interconnect fabric, network processors, and silicon photonics technology. 

While Intel's math does seem to work, and while being a "30% share player" does suggest that there's room for growth, I think the fact that Intel is keen to lump these segments together when talking to investors indicates that Intel is trying to hide something.

Is Intel a victim of its own success? 

There's a school of thought that Intel, by the nature of its near-monopoly position in the server market, was bound to see its share of the server processor market erode, and perhaps significantly so, once credible competitive threats arrived. While that's true, the real issue is that Intel put itself in a position to allow such credible competitive threats to emerge in the first place.

Considering Intel has the advantage of being the incumbent player in the server processor market, and considering the company has long been able to invest far more into the development of key technologies than its competitors could've hoped to for many years, it's nothing short of astonishing that the company has left open some serious competitive gaps in its server processor product portfolio that competitors are keen to exploit. 

For example, fellow chip giant Qualcomm (NASDAQ:QCOM), which is one of the main players trying to capture share from Intel in the data center chip market, recently demonstrated its Centriq 2400 data center processor handily outperforming Intel's latest Xeon Scalable processors in certain relevant data-center tasks. 

I think part of the problem is that Intel's chip manufacturing group has run into significant problems, which led to substantial delays and product cancellations that hurt the company's competitiveness in the data center. 

Another part of the problem, though, seems to be that Intel didn't direct its considerable resources to the task of building a broad enough portfolio of processors designed to meet the varying needs of different data center players. 

The point is, Intel couldn't have stopped competition from cropping up to try to go after its large and lucrative server processor business, but it could've made sure that it had leadership products across the board to limit the impact of those competitors on its business. 

Ashraf Eassa owns shares of Intel and Qualcomm. The Motley Fool owns shares of Qualcomm. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.