"News " Intel is satisfied about 7nm progress

Marco Green
January 22, 2021

Intel said fourth-quarter sales from its PC chip business were $10.9 billion, compared with analyst estimates of $9.57 billion, according to FactSet data.

"To me, it is an opportunity to help and to unquestionably put Intel and the United States in the technology leadership position". Most other USA chip companies shut or sold plants and tapped other firms to make the components. Bernstein analyst Stacy Rasgon questioned whether Gelsinger, now the chief executive of VMware Inc who previously spent 30 years at Intel and announced his intention to return just last week, has had sufficient time to dig into the issue.

However, while Intel will continue to largely embrace its traditional model as an integrated device manufacturer, Gelsinger said, the chipmaker will likely expand its use of chip foundries for future products. It is now lagging behind TSMC and Samsung Electronics Co., which make chips for Intel competitors, such as Advanced Micro Devices Inc., and big Intel customers including Amazon.com Inc. and Apple Inc.

AMD shares rallied in extended trading while Gelsinger discussed his goal of improving Intel's in-house manufacturing.

Intel said that its board approved an increased cash dividend of $1.39 per share in what may have been a move to placate investor Dan Loeb of Third Point, who has called on Intel to bolster its weakening position in the chip market.

The company did not issue a full-year forecast, a change from past practice, but said it will do so no later than April, when it reports first-quarter results.

Intel is rumored to be buying capacity at Globalfoundries - 01/28/2020 09:19 AMIf you've seen last weeks yearly results for Intel, you know it, they can not fab processors and chips in general fast enough.

Shares are up 17% since January 13, when the chipmaker unexpectedly announced that former Intel chief technology officer Gelsinger will return to the company, 12 years after he left. Earnings in the second part of the year will partly depend on whether corporations increase spending on new hardware, he added. Analysts were looking for US$16.2 billion on average, according to data compiled by Bloomberg. "We're committed to leadership products but also innovation that fundamentally has us leading the industry in a consistent basis", Gelsinger said. "They've been very quiet". But sales to cloud computing customers, some of the largest and fastest-growing purchasers of data center chips, were down 15 per cent in the fourth quarter.

Intel cited much stronger than expected PC sales for the happy surprise: Revenues were $2.6 billion higher than expected thanks to PC-centric revenues that were driven by a 33 percent gain, year-over-year, in PC unit sales. Wall Street was looking for US$5.37 billion. Data center chip operating margins were 34% in the quarter, down from 48% a year earlier. Owners of large data centers are working their way through unused stockpiles of chips.

Fourth-quarter profit, excluding some items, was US$1.52 a share on US$20 billion of revenue, down 1 per cent from a year earlier. Net earnings were $1.52 per share, 41 cents higher than the analyst consensus.

Intel's gross margin, the percentage of revenue remaining after deducting the cost of production, was 56.8 per cent. He indicated that Intel has plans to introduce its first products based on 7nm technology in 2023 - still later than originally planned.

-With assistance from Abhishek Vishnoi and Peter Elstrom.

Other reports by Click Lancashire

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