Tencent technology news on January 27, Intel is still suffering from the negative impact of chip shortage. Computer computer novel coronavirus pneumonia is difficult to make full use of the new crown pneumonia epidemic and the huge demand for new personal computers, because you can’t make notebook computers with Intel chips only. However, this did not prevent Intel from having the best fiscal year ever. In the just released fourth quarter financial report of 2021, Intel reported the highest quarterly revenue and the highest annual revenue ever, with us $19.5 billion and US $74.7 billion respectively, and even set four other revenue records. However, Intel’s profit is not so optimistic: net profit in the fourth quarter fell by 21% year-on-year, and annual profit fell by 5% compared with 2020.
Pat Gelsinger, Intel’s chief executive, warned that a shortage of chips from other suppliers limited the company’s growth during Intel’s third quarter 2021 earnings report last October, when the company announced that its customer computing group (CCG) revenue had actually shrunk by 2%. Today, Intel’s fourth quarter results show that the situation has not improved: CCG revenue fell 7% year-on-year, also dragged down by laptops. Intel’s report showed that the revenue of notebook computers fell by 16% year-on-year because it can’t ship as freely as it thought, although it can make more money from each computer, and the average selling price of these notebook components increased by 14%.
However, the desktop business grew, and other departments of the company also made up for the decline. Intel’s data center revenue increased by 20% year-on-year to $7.3 billion. Smaller businesses such as Intel’s Internet of things group and Mobileye (autopilot) also saw more demand, compared with the fourth quarter of 2020, which increased by 36% and 7% in the fourth quarter of 2021. This year, these two figures have increased by 33% and 43% respectively.
Intel said: “novel coronavirus pneumonia (DCG) has seen a record high in the fourth quarter, with the strong recovery of the server business in the enterprises and government departments. The IoTG has created a record quarterly performance, reflecting the strong demand for recovery from the impact of the new crown pneumonia epidemic.” CCG ” Another $10 billion was generated in the first quarter, proving that personal computers are more important than ever. ”
Last October, Gelsinger said that the chip shortage would not end until at least 2023, which was a bit bad for Intel because personal computers were undergoing a renaissance. 2020 is the first significant growth in the personal computer industry in a decade. Earlier this month, market research institutions Gartner and IDC reported that the sales of personal computers increased by an additional 10% – 15% in 2021, and the shipments of personal computers exceeded 340 million. The demand is large enough that IDC analysts said that if it were not for the shortage of supply, the demand might be higher.
But Intel will not automatically benefit from all growth, not just because of the restrictions of other suppliers. These days, Intel is also facing more fierce competition. Now many of the best laptops don’t carry Intel chips at all, but apple and AMD chips. This has happened many times in the past decade! AMD will further promote in the field of notebook computer chips this year, and Qualcomm will join the competition again. This is a difficult time for Intel to lag behind in processor technology, even though our first comment on alder lake may seem helpful.
Intel does have some interesting initiatives to reverse its fate, including investing tens of billions of dollars in more chip manufacturing facilities. For example, Intel invested $20 billion in Ohio. In addition, Intel is also developing an independent graphics processor called Intel arc. It looks like a dark horse and is expected to shake the GPU market for desktops and laptops later this year.
In the fourth quarter earnings conference call, Gelsinger also talked about the shortage of chips, especially its impact on laptops. “The shortage of substrates, components and chips limits our customers’ ability to transport and complete systems throughout the industry. This is most felt in the customer market, especially in the laptop market, but the constraints also affect other markets widely, including cars, the Internet of things and data centers,” he said
He added: “as we predict, these ecosystem constraints are expected to continue through 2022 and 2023 as they gradually improve over this period of time.” Later, Gelsinger proposed on the conference call that components such as power controller and display cover controller are difficult to find.
David zinsner, Intel’s chief financial officer, also pointed out that laptop sales may also be affected by “inventory consumption because original equipment manufacturers (OEMs) are trying to solve inventory imbalances caused by ecosystem constraints, which limit their ability to ship systems in some market segments”. We are curious whether this means that we will see less popular old laptops on sale again.
But Gelsinger said Intel “has begun to see inventories return to pre outbreak levels” and said the company’s shipments of laptop processors have been strong. “Tiger lake has shipped more than 100 million tablets, making it the fastest-growing laptop in our history,” he said Intel previously announced that tiger Lake shipped 30 million tablets in March last year.
“According to the timetable we set in July, the R & D plans of Intel 4, Intel 3, Intel 20a and Intel 18a are still completed on schedule or ahead of schedule,” Gelsinger said He was referring to the company’s Roadmap for the next generation of process nodes that are getting smaller and smaller.
The US semiconductor giant is in a period of transition after falling behind its competitors in chip manufacturing. Competitors have robbed it of market share in some semiconductor categories. Gelsinger, who took over as CEO in February 2021, has been trying to reverse this decline and said in December that his plan to turn losses into profits could take more than five years.
Intel has expanded its chip manufacturing capacity at home and abroad in the past year. Recently, the company announced that it will build a new chip manufacturing plant in Ohio and expects the annual sales of the semiconductor industry to double from $500 billion to $1 trillion. “My purpose as CEO is to expand our share in this growing market. Therefore, I must invest and expand our capacity faster than doubling,” Gelsinger said
At the same time, Intel’s plan to invest tens of billions of dollars in new Fabs is not necessarily welcomed by financial analysts. On the conference call, the company had to defend itself repeatedly to deal with the sharp problems related to the decline in profit margins. Intel said profit margins should pick up at the end of the five-year window. This will be after the wafer plants in Arizona and Ohio start producing chips in 2024 and 2025, respectively. (small)