Intel Financials Clouded by 7-nm Delays

Intel delivered a strong quarter financially, but the firm warned that its next-generation 7-nm chipsets would be delayed yet again.

Intel posted a net income of $5.1 billion (up 10 percent year-over-year) on revenues of $19.7 billion (up 20 percent) for the quarter ending June 30.

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“It was an excellent quarter, well above our expectations on the continued strong demand for computing performance to support cloud-delivered services, a work- and learn-at-home environment, and the build-out of 5G networks,” Intel CEO Bob Swan said in a statement. “In our increasingly digital world, Intel technology is essential to nearly every industry on this planet. We have an incredible opportunity to enrich lives and grow this company with a continued focus on innovation and execution.”

Intel’s PC business is its largest and contributed $9.5 billion in revenues, a gain of 7 percent YOY. But its datacenter business grew an incredible 43 percent to $7.1 billion. “These results were driven by strong sales of cloud, notebook, memory[,] and 5G products in an environment where digital services and computing performance are essential to how we live, work and stay connected,” Intel said.

But it also provided some troubling guidance for the future. While it noted it was “accelerating its transition to 10-nm products this year,” Intel warned that the next-generation 7-nm are being delayed further.

“The company’s 7nm-based CPU product timing is shifting approximately six months relative to prior expectations,” Intel said. “The primary driver is the yield of Intel’s 7nm process, which based on recent data, is now trending approximately twelve months behind the company’s internal target.”

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Conversation 15 comments

  • kherm

    Premium Member
    23 July, 2020 - 5:25 pm

    <p>This is just getting pathetic. The last process that Intel delivered without delay was 22nm. 14nm was delayed. 10nm was delayed and still is not widely available. </p><p>Meanwhile, AMD has 7nm in every sector and their 7nm+ and 5nm nodes are on track </p>

    • mattbg

      Premium Member
      23 July, 2020 - 6:29 pm

      <blockquote><em><a href="#556059">In reply to kherm:</a></em></blockquote><p>So what benefits vs. Intel do we see from AMD having moved to 7nm?</p><p><br></p><p>Genuine question.</p>

      • martinusv2

        Premium Member
        23 July, 2020 - 9:03 pm

        <blockquote><em><a href="#556082">In reply to mattbg:</a></em></blockquote><p>Power consomption for one. Less heat.</p>

    • Daishi

      Premium Member
      24 July, 2020 - 6:28 am

      <blockquote><em><a href="#556059">In reply to kherm:</a></em></blockquote><p>Well, AMD don’t ’have’ 7nm. TSMC have 7nm and AMD are using it.</p>

      • eric_rasmussen

        Premium Member
        24 July, 2020 - 12:44 pm

        <blockquote><em><a href="#556157">In reply to Daishi:</a></em></blockquote><p>TSMC only makes chips. They're experts in lithography because it's the only thing they do. AMD designs chips and has been doing a good job of it because it's the only thing they do.</p><p><br></p><p>Intel is trying to be Intel, Qualcomm, and TSMC at the same time. I commend then for trying to do everything in-house, but sometimes it's better to leverage external experts rather than trying to become an expert yourself.</p>

  • Thomas Parkison

    23 July, 2020 - 6:04 pm

    <p><span style="background-color: rgba(255, 255, 255, 0.8); color: rgb(26, 26, 27);">Meanwhile, AMD is looking better and better.</span></p>

  • cavalier_eternal

    23 July, 2020 - 7:05 pm

    <p>For context, AMD made 6.7 billion in 2019 or less than half of what Intel makes in a single quarter. So any technical advantages they have over Intel really don't amount to much in the way of revenue.</p>

    • Paul Thurrott

      Premium Member
      24 July, 2020 - 8:48 am

      It’s not that bad. Intel is obviously dominant in PCs. But Intel only gets half of its revenues from PCs. AMD is closer to 80 percent. So AMD’s revenues are closer to 25 percent of Intel’s in the PC space. And really, 25 percent isn’t bad given the history etc.

      • cavalier_eternal

        24 July, 2020 - 9:36 am

        <blockquote><em><a href="#556174">In reply to paul-thurrott:</a></em></blockquote><p>To be clear, I'm not saying AMD is doing poorly "bad", the chip market isn't a zero sum game. I am responding to the crowd that thinks AMD is somehow handing Intel their own arse. </p><p><br></p><p>Also, if you want to compare revenue based on market type AMD it is at about 14% not 25%.</p><p>Intel = 9.5 x 4 = 38</p><p>AMD = 6.7 x 0.8* = 5.36 </p><p>5.36/38 = 0.14 or 14%</p><p><br></p><p>Long story short, AMD is doing just fine. 6.7 Billion a year is nothing to sneeze at and is better than a few years ago when they were in the red but they aren't at the level of Intel and not by a long shot. </p><p><br></p><p>*Edited from original post: In AMDs FY2019 Computing and Graphics made up 70% of AMD revenue not 80%. So that would be more like 12% of Intel. </p>

  • olditpro2000

    Premium Member
    23 July, 2020 - 9:04 pm

    <p>Intel apparently has a contingency plan if they can't get high enough yields at 7nm…use third-party foundries.</p><p><br></p><p>They need to score a win somewhere soon.</p>

  • Daishi

    Premium Member
    24 July, 2020 - 6:24 am

    <p>Surely not! Not an Intel product development being delayed? That just doesn’t happen…</p><p><br></p><p>This company has been the biggest impediment to progress in the PC industry for a decade now and they show every sign of trying to drag it to the grave with them. It’s no wonder Apple were so keen to be shot of them.</p>

  • codymesh

    24 July, 2020 - 6:47 am

    <p>not sure if this matters as long as Intel can achieve performance and pricing with 10nm – which is just a marketing name these days anyway, because Intel's 10nm is more than AMD's (TSMC) 7nm. But as of now AMD does has the momentum and superior performance. AMD's stock price passed Intel today which is amazing.</p><p><br></p><p>Intel needs to stop behaving like they're a monopoly, because unlike in the past 10 years, both OEMs and consumers have real alternatives now</p>

    • cavalier_eternal

      24 July, 2020 - 9:56 am

      <blockquote><em><a href="#556159">In reply to codymesh:</a></em></blockquote><p>Comparing the stock price of two companies is a meaningless unless they both have the same number of shares. When you multiple number of shares by the stock price you get market cap which is the perceived value of the company. </p><p>Intel's market cap is 210b and AMD's is 76b. </p>

  • blue77star

    24 July, 2020 - 8:36 am

    <p>Intel is a chip maker and AMD is a chip designer and those two things are different. Intel 10nm has higher density than TSMC 7nm in other words Intel 10nm will give you higher clock speed and less heat for the same amount of silicon. Nothing to worry about here. Intel's earning show that AMD didn't even scratch the surface. Anyways, competition is good.</p>

    • Elwood P Suggins

      24 July, 2020 - 10:24 pm

      <blockquote><a href="#556173"><em>In reply to blue77star:</em></a></blockquote><p>You and I know Intel's 10nm is as good or better than AMD's 7nm – but the general market just sees 7nm vs 10nm.&nbsp;Right now, Intel has lost the handle on their vaunted generation-plus techological manufacturing lead at the same time as AMD's design team has lapped them.</p><p><br></p><p>Somebodies at Intel should be worried.&nbsp;After all, it was Intel's own late Andy Grove who coined the phrase "only the paranoid survive"…</p>

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