Intel Lost Nearly $500 Million In Brutal Second Quarter (gizmodo.com) 79
An anonymous reader quotes a report from Gizmodo: Intel could really use a few bucks from the recently passed (by Congress, at least) $280 billion CHIPS and Science ACT. The U.S. chipmaker shocked investors on Thursday, revealing it lost nearly $500 million in Q2, its first quarterly loss in years. The company cited weakened demand for PC components and downturns in the broader economy as the main culprits for the declines. Overall, Intel's revenues were down 22% year over year. Those results have forced Intel to lower its expected yearly revenues down from $68 billion to $65 billion. Yikes.
Intel CEO Pat Gelsinger said the results were "disappointing." "This quarter's results were below the standards we have set for the company and our shareholders," Gelsinger said. "We must and will do better. The sudden and rapid decline in economic activity was the largest driver, but the shortfall also reflects our own execution issues." He continued. "We are being responsive to changing business conditions, working closely with our customers while remaining laser-focused on our strategy and long-term opportunities. We are embracing this challenging environment to accelerate our transformation." In his prepared statements, Chief Financial Officer David Zinsner elaborated on the declines, saying a worse than expected covid-19 related downturn was partly responsible for declining consumer demand. On the economic side, Zinsner said a combination of rising inflation, higher interest rates, and downstream effects from the war in Ukraine hit the company particularly hard. "Due to the difficult macroeconomic environment together with our own execution challenges, our results for the quarter were well below expectations and necessitate a significant revision to our full-year financial guidance," Zinsner said.
Now, Intel says it's planning to pass on some of that inflationary pricing to consumers. In statements first spotted by PC World, Zinsner reportedly confirmed the company's getting ready to hike prices for components, so you might want to buy any new Intel chips before the fourth quarter. While Zinsner didn't say how much prices will rise by, previous reports claim the company's considering increases of up to 20% for certain processors. "You know we can absorb a lot of inflationary impacts that others can't," Zinsner said, according to PC World. "But at this point now that some of the price increases, inflationary increases, have turned out to be more permanent, where there's a certain amount that we do need to pass on to the customers." "As we look beyond the near term, the semiconductor industry continues to be at the beginning of a new structural growth phase driven by four superpowers: ubiquitous compute, pervasive connectivity, cloud-to-edge infrastructure and AI," added Gelsinger. "What remains very clear, even during this period of uncertainty, is the growing importance of silicon to the global economy and to each of our daily lives."
Intel CEO Pat Gelsinger said the results were "disappointing." "This quarter's results were below the standards we have set for the company and our shareholders," Gelsinger said. "We must and will do better. The sudden and rapid decline in economic activity was the largest driver, but the shortfall also reflects our own execution issues." He continued. "We are being responsive to changing business conditions, working closely with our customers while remaining laser-focused on our strategy and long-term opportunities. We are embracing this challenging environment to accelerate our transformation." In his prepared statements, Chief Financial Officer David Zinsner elaborated on the declines, saying a worse than expected covid-19 related downturn was partly responsible for declining consumer demand. On the economic side, Zinsner said a combination of rising inflation, higher interest rates, and downstream effects from the war in Ukraine hit the company particularly hard. "Due to the difficult macroeconomic environment together with our own execution challenges, our results for the quarter were well below expectations and necessitate a significant revision to our full-year financial guidance," Zinsner said.
Now, Intel says it's planning to pass on some of that inflationary pricing to consumers. In statements first spotted by PC World, Zinsner reportedly confirmed the company's getting ready to hike prices for components, so you might want to buy any new Intel chips before the fourth quarter. While Zinsner didn't say how much prices will rise by, previous reports claim the company's considering increases of up to 20% for certain processors. "You know we can absorb a lot of inflationary impacts that others can't," Zinsner said, according to PC World. "But at this point now that some of the price increases, inflationary increases, have turned out to be more permanent, where there's a certain amount that we do need to pass on to the customers." "As we look beyond the near term, the semiconductor industry continues to be at the beginning of a new structural growth phase driven by four superpowers: ubiquitous compute, pervasive connectivity, cloud-to-edge infrastructure and AI," added Gelsinger. "What remains very clear, even during this period of uncertainty, is the growing importance of silicon to the global economy and to each of our daily lives."
Sales to Russia (Score:2)
Bonuses? (Score:2, Flamebait)
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You Don't know ? The US Gov voted to support Chip Manf.
We both know, 80% of the funds from the US will go to high level managers as bonuses, 15% to share holders and the other 5% to support building/upgrading the plants and hiring workers.
Bonuses for All! (Score:2, Interesting)
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Yup, that's why Intel was pushing hard for this bill. They can only survive with permanent taxpayer-funded handouts.
Socialism at its finest for the welfare queens.
Makes me wonder what AMD comes up with (Score:2)
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Intel stock dropped more than 8% on this news. AMD and other semiconductor-heavy companies haven't reacted yet, but it seems like they will be subject to the same drop in demand.
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According to SteamHW survey Intel still owns 80% of the market and is still vast majority of DIY buyers. Both are AMD's home market as corporations will always be 90% intel due to reliability and brand being most important.
Re:Makes me wonder what AMD comes up with (Score:5, Informative)
According to SteamHW survey Intel still owns 80% of the market and is still vast majority of DIY buyers. Both are AMD's home market as corporations will always be 90% intel due to reliability and brand being most important.
That may be true true if you look at PC hardware used for playing Steam games, but A. that includes a lot of computers that were sold years ago and doesn't reflect current hardware sales, and B. that ignores all the tablets that some people use in place of computers. Here are some other numbers to consider:
And that's before you factor in anyone who bought an Android or iOS tablet who otherwise might have bought a computer. Apparently, iPad models outsell Mac computers by something like 5:1. Between iPad tablets and Android tablets, Intel's share of the total PC/tablet market is only about 38.29%.
And that, right there, is why Intel is hurting. Losing roughly 13.5% of your total PC CPU sales almost overnight would cause a not insignificant amount of pain even for a company the size of Intel.
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With Zen4 chipsets offering support for thunderbolt, and even fairly low end AMD systems supporting ECC (which is increasingly relevant today, since memory sizes have gone up so much) you really have to care about those last few FPS to justify spending twice as much on an Intel processor going forwards, too. The bulk of the corporate desktop purchases are probably still Intel, but they just don't offer any advantage over AMD for most users.
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For gaming yes. But laptops now own an incredible market share and AMD still struggles with energy efficiency. My own work laptop is dying and I was given the choice between 9 intel laptops / convertible tablets, with a note that Macbooks are also available but must be requested through a separate department.
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While your numbers do look dire for the PC market in general, it doesn't explain the discrepancy between Intel and AMD the latter of which is having no problem turning a profit despite a far smaller market share while also being subject to all the additional pressures you mention. While final numbers haven't been posted yet the expectation for AMD is around 70% growth y-y and 10% growth over last quarter.
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While your numbers do look dire for the PC market in general, it doesn't explain the discrepancy between Intel and AMD the latter of which is having no problem turning a profit despite a far smaller market share while also being subject to all the additional pressures you mention. While final numbers haven't been posted yet the expectation for AMD is around 70% growth y-y and 10% growth over last quarter.
AMD didn't just lose their chip sales to one of their largest customers, resulting in the sudden loss of about one-sixth of their sales volume. When you get used to a certain level of output and build your operating costs around that, if your output suddenly falls off a cliff — even a small cliff — you're going to be hurting.
Additionally, AMD has been fabless since 2009. Intel, meanwhile, has been trying to keep up with everybody else's process technology, and on top of those R&D costs, th
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Yeah, Steam hasn't surveyed my new Threadripper machine yet. It's going to skew averages for CPU core count and memory all on it's own. Totally (technically) true
It's the first time in my life I bought a non-Intel CPU for my PC, in fact. One data point isn't a trend, and I don't expect the trends to suddenly reverse, but I can see AMD making more steady gains over the next few years if they keep up what they're doing.
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Username checks out for Intel shilling.
Steam's Hardware Survey for CPUs [steampowered.com] shows Intel only has 68.47% of CPUs and AMD having 31.51% of CPUs so I don't know where you are getting this "Intel still owns 80% of the market" nonsense from. All the DIY builders I know switched to Ryzen processors. Intel has been the "budget" CPU for the past few years.
Likewise, I'm not sure which ass you are pulling your stats out with your "corporations will always be 90% intel" claim.
* Back in 2019 [amd.com] AMD had 15% market share.
* in
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AMD is a Taiwanese owned company. They're going to do what's most profitable and in the interest of Taiwan. As for Intel, they're still the leader for CPU sales, because their products provide more "value", and AMD still can't produce CPUs at the production capacity of Intel. (But people also don't realize that AMD is not in the desktop/server CPU business so much as the SoC business.)
Plenty of used CPUs (Score:5, Interesting)
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You may not need the extra performance personally, but new stuff is very much more powerful than 10 years ago. And not just the CPU, modern motherboards with recent chipsets and memory have much faster everything.
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What we're missing is applications (I mean that in the larger sense of the word, not apps). With so much having moved to the cloud, the desktop could be 100 times faster and most users wouldn't be able to tell. If, however, we had a major move towards not sending our data away, we'd see application growth return.
One specific area I think could really take off is AI assistants. They are greatly hampered now by the resistance to giving them enough data to truly start performing the functions of human executiv
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There's no question, every part of the system has gotten faster. But most home users don't notice any significant improvement since any dual-core system with a SSD, unless they're gamers. That's not super uncommon, but for the majority spending their lives in a web browser, a fifteen year old computer has plenty of oomph. Or it would with an ad blocker :)
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I just love my 16 hardware threads running at 3Ghz+ and 32G of memory. And that's getting old... time for at least a 12 core machine, or 16, with 64G ram. Gimme.
And yeah, I notice. Totally. Night and day.
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I'm still using a FX-8350 and it still seems like a monster compared to the computers I started with. I am looking at upgrading to a better used GPU now that prices are falling slightly, but I'm otherwise pretty happy. I've got 8C/8T at 4GHz and 32GB of RAM. It's a total turd compared to modern CPUs in its price range (with double the performance) but I'm not currently in the market for a new MB combo. I'm about $1000 into this thing with upgrades over time, everything in it is somehow a quality component d
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I don't think you're correct.
My daily machine (not my fast desktop, which is a more occasional use thing) is a 11 year old ThinkPad. It was pretty maxed out at the time. Quad core i7 Q820 (1.7 GHz), 16 G ram SATA II SSD etc etc etc. I run firefox with all the blockers.
Mostly it's fine, but I it's beginning to feel a bit long in the tooth in some places. Web video for example is wildly horrendously inefficient, and so 1080p60 is really pushes it, even though of course if I download the video, mplayer doesn't
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Mostly it's fine, but I it's beginning to feel a bit long in the tooth in some places. Web video for example is wildly horrendously inefficient, and so 1080p60 is really pushes it, even though of course if I download the video, mplayer doesn't break a sweat.
You used to be able to use mplayer or vlc to play that stuff inside your browser, before Firefox and Chrome removed NPAPI. A Pale Moon user gets to have better support on platforms like that than a Firefox or Chrome user. It's not the hardware's fault. It's Google's and Mozilla's.
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I was not aware of those plugins! Too late now.
It's amazing how slow the browsers are. I guess that they pump the video through the DOM compositor every frame, and there's no fast path where that doesn't happen. My old single core eee 900 could play 1080p30 just gone so I assume it could play 60 too but that wasn't common back then. I'll astounded how inefficient videos in a browser are by comparison.
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You might be interested in send to mplayer [mozilla.org], formerly send to vlc. Dunno why they changed. I'm not sure how many videos it actually gets though. I've been ruthlessly purging all my old hardware of late. I have too much crap.
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Ah thanks, I'll look into that. I do have a junk pile that I need to purge, tbh. The 11 year old laptop isn't in it though, it's my daily machine. I've got a fast desktop in my study for stuff I need a beefy machine for, but wordle over breakfast, shouting angrily on slashdot or doom slaughter maps are fine.
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Just one more reason why I prefer to download youtube videos before watching them, if I want a good experience. Often it doesn't matter, but when it does, I predownload every time. Plus, then I already have it, and don't have to download it again if I decide I want to save it.
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modern motherboards with recent chipsets and memory have much faster everything
And M2 is a huge deal, so much faster than SATA.
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Whose perception? I perceive a massive difference between my M2 machines and my Sata machines.
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I'd noticed. I picked up a 2010 Mac Pro for $100 and its CPU does just fine (6 core 3.3 GHz Westmere). The GPU could use an upgrade, but for what I use it for it's fine. A suitable GPU so I could run Mohave is three times more than the rest of the machine.
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I still have one of those but even though it's powerful enough for my uses, I don't like paying for the electricity to run it. It has the performance of a modern 50W system but draws several times that from the wall to achieve not very much. I would use a G5 as my daily driver just for kicks and be happy doing it, but a quick google says it idles at 80-160W depending on the model and I bet I could get my non-x86 kicks from a raspberry pi. At this point I'm hoping apple figures out how to make a competitive
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I just bought a replacement for the 2016 "gaming PC" in the house, at the same price point (around 900€). Benchmarks up by a factor of 4, both CPU and GPU.
I'll confess I was surprised, because I also was expecting less. But those are the numbers I found in the benchmark sites.
2016 was an MSI Nightblade with an Intel i5-6400 and Nvidia GTX 960
2022 is a HP Victus* 15L with an AMD Ryzen 5 5600 and Nvidia RTX 3060 Ti
(*Trust HP marketing to come up with a name meaning "loser"; good thing Latin is a dead la
Ts and Cs (Score:2)
Intel shouldn't get money (Score:5, Interesting)
Intel has been losing share in their market because they failed to execute to plan. Why? Because they failed to adequately reinvest in an industry where every new generation is so important and comes so fast that you have to keep three R&D teams working to bring the wow to the next three generations at all times. Why? Not because they didn't have the money but because they misspent it. In the meantime, other American companies executed well. Why should Intel be essentially bailed out after bad management?
More importantly, what would they do with it? Build plants to make what? What great product do they have that they can't make enough of? Now,,, if they want to be a competitive fab for the competitors who have the products, great! But, they've mostly resisted that route.
It would just seem wiser if we're going to go this socialist route to start something new. You can't just time travel and give money to the Intel team of old. Find some way to put together new competitors - plural.
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Trust me even gamers still by Intel by a vast margin and do not know do any research other than Intel is always better. Stem HW survey backs this up.
What happened is Crypto miners buying 10 million cpus and businesses who are freaking out buying laptops for their now WAH employees thanks to COVID already upgraded and no longer need any computers.
I bet if we look at 2018 we would see similar sales numbers.
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Gamers, and in a more general sense, applications that really require single core speed supremacy, are a specialized market. Most applications these days benefit more from lots of parallelism and anything that reduces power consumption. The market for single core speed isn't big enough to be the bread and butter of a modern chip fabricator. For that, you need to make chips for high end items that sell in the billions of units, like phones. One of Intel's biggest mistakes was missing that transition. At lea
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Trust me even gamers still by Intel by a vast margin and do not know do any research other than Intel is always better.
No it's because we fear pluton. Pluton puts anti piracy and denuvo and merges them with the operating system in windows 10/11+, they are handing control of your PC over to the media and content industries and future PC's can be banned from the internet.
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Stem HW survey backs this up.
Steam HW survey shows the top 36% of graphics cards by popularity to be the cheapest entry level options in their respective generations. The HW survey does not reflect "performance gamers". It reflects overwhelmingly the casual gamer who really doesn't give a shit about the performance of hardware.
It also shows the majority of CPUs are 4-6 core, neither of which is at all a reflection of any "gaming" product that either Intel or AMD are currently pushing on the market. Heck 23% of the hardware survey user
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Failing US car makers got the same deal (Score:2)
Slash and Burn and Lee Iacocca (Score:4, Interesting)
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Better be careful with price increases (Score:3)
I tend to believe a big reason for reduced demand is already cost. People thinking "I'll hang on to this another 6 months and see" rather than pay a premium for equipment that the chip shortage has pushed prices too high on. The hardware is generally good enough... why waste cash now.
If they increase prices much they will get an even bigger backlash over time. Best be careful!
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Whatever happened to the "chip shortage?" (Score:5, Interesting)
If you read the news you will see no end of sob stories about how companies can't make their number because they can't get parts. And a bit part of that is the "chip shortage."
So you would think that Intel could sell all the chips they can make, right?
Different chips (Score:3)
Intel doesn't make the 1990s-era chips that the legacy auto industry desires.
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Yeah I realized that. The media generally makes no distinction. Remember when Ross Perot claimed there was a big distinction between "computer chips and potato chips?" There are still a lot of media figures around who haven't even absorbed that, much less that you can't drop in a SoC where you need a power control device.
Chips are chips, and all included in a single line on their line graphs.
Re: Whatever happened to the "chip shortage?" (Score:2)
I see your point, but a chip shortage is not at odds with chip companies not making as much money as they were hoping to. Right? The two kinda directly correlate.
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So you would think that Intel could sell all the chips they can make, right?
The chip shortage was nothing to do with the sub 12nm market. At no point were Intel or AMD CPUs unavailable in the past year nor selling above RRP.
The chip shortage is solely related to *other* components beyond the core CPUs or GPUs (though NVIDIA did have production problems it wasn't related to the chip shortage but rather to an unexpectedly high demand).
What I Woke up to (Score:2)
Let me guess. Trump voter?
Accounting terminology (Score:3)
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'"Lost $500M" doesn't mean there was a net outflow of $500M, but rather they earned $500M less than expected.'
False, net GAAP earnings were -$0.5 billion
'That means they earned at *least* $500M.'
Even if your first claim were true, this does not follow in any way.
x86 is dead. (Score:2)
ARM is the future.
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Crony capitalism to the rescue (Score:1)
That's OK, Congress & Biden just gave them a massive subsidy (the Chips and Science Act)
Poor data center sales (Score:2)
Intel's being hit by low data center sales as well.
That implies that (1) cloud adoption is picking up, and (2) there's so much unused capacity in local data centers that when people forklift up to the cloud the cloud providers don't need to buy more boxes.
not a surprise (Score:2)
The company cited weakened demand for PC components and downturns in the broader economy as the main culprits for the declines
well, they should not have sent letters to the Chinese Government, pissing them off so badly that they're ordering suppliers to cease using Intel parts. yes, all Intel parts. that has a cascade-effect where S.E. Asia OEMs start to follow that lead.
They did not loose it (Score:2)
Optane, not inflation (Score:2)
I could swear I remember reading an article a few days ago (possibly here, on Slashdot) that said Intel decided to wind down its Optane division & write it of as a loss... approximately a $500 million loss.
If that's the case, then someone who's blaming the loss on "inflation" is either confused, or full of shit.