Intel this week reported a quarterly net income of $8.1 billion on revenues of $18.4 billion, a decline of 7 percent year-over-year (YOY). The results beat expectations, but Intel’s warning about the future triggered a stock price decline.
“Q1 was a strong start to the year, exceeding expectations on both the top- and bottom-line,” Intel CEO Pat Gelsinger said. “With a $1 trillion market opportunity ahead of us, we remain laser-focused on our IDM [integrated device manufacturing] 2.0 strategy. We executed well against that strategy in Q1, delivering key product and technology milestones and announcing plans to expand our manufacturing capacity in both the US and Europe to meet the continued demand for semiconductors and drive a more balanced, resilient global supply chain.”
Intel still derives about half its revenues from its PC chipmaking business: the Client Computing Group (CCG) delivered $9.3 billion in revenues, down 9 percent YOY. Its Datacenter and AI Group brought in an additional $6 billion in revenues (up 22 percent), and the Network and Edge Group added $2.2 billion (up 23 percent). Interestingly, Intel Foundry Services grew 175 percent to $283 million.
More problematically, Intel issued a warning for the future.
“We believe the overall semiconductor shortage will now drift into 2024, from our earlier estimates [of] 2023, just because the shortages have now hit equipment and some of those factory ramps will be more challenged,” Gelsinger told CNBC in an interview.
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