News Intel Posts $500 Million Loss for the First Time in Decades as Sales Drop 17%

[InvalidError]

At a time when AMD's CPU profits are soaring, Intel is losing money in its CPU division. Should this continue for another few years, Intel will become an historical footnote.

While Intel may be losing sales and taking a hit on gross margins, it still isn't losing any actual money. Intel's CCG made +1G$ net income in Q2. AMD won't get magically spared from the market going back to pre-COVID sales: AMD's income was down 21% Q/Q for Q1 too.

The only reason Intel posted an overall loss is because it ramped up investments in new equipment and facilities slightly beyond what its net income can cover. It is perfectly normal for companies to post losses when making major investments and Intel can easily take 500M$ out of its investment slush fund to cover the deficit if it wanted to, though it is likely still cheaper to borrow money at current interest rates.

 

[KyaraM]

Irrelevant. Intel has been leaking share steadily for years like a sieve. At a time when AMD's CPU profits are soaring, Intel is losing money in its CPU division. Should this continue for another few years, Intel will become an historical footnote. I would bet AMD does in fact do "significantly better" this quarter.

There is absolutely no mystery about any of this. Intel is simply not a company geared and structured internally for continuous competition. Gelsinger and crew hail from the time when Intel was a CPU monopolist and could get away with paying companies not to sell AMD products or any other competitor's products. They paid Dell huge sums for years not to sell AMD products, for instance, hoping to run AMD out of business as they did every other would-be CPU competitor. The entire time AMD was burning the midnight oil and spending a tenth of Intel's R&D budget, Intel was asleep, raking in the dough and under no hurry to do much of anything. The cultures between the two companies are radically different. AMD executes perfectly, whereas Intel cannot tie its shoes on time these days. Intel's ultimate fate is far from assured, imo. It's a race, and may the best company win. I don't think Gelsinger has a clue, frankly. It was just a few months ago, when he said, "Now that I've put AMD in the rear-view mirror..." The joke in the industry was that Gelsinger was driving backwards... The situation reminds me of the disclaimer on a stock prospectus: "Past performance is no guarantee of future profitability".

They will be a footnote? You mean like AMD is currently a footnote after teetering on the brink of bankruptcy for years, yes? Oh, wait, they came back, and Intel isn't even close to that point. Intel at least never nearly went bankrupt out of incompetence, something AMD cannot claim for themselves. And they execute perfectly? Yeah, so perfectly they can't even make a powerpoint presentation without showing how crap their internal communication is, or else they would haven gotten their RDP and PPT for Raphael straight the first time, not after two requests for clarification. Awesome execution, when they can't even get internal communication straight.

Btw, you would need to be delusional to believe that AMD wouldn't have paid OEMs had they had the chance; they are big corp, too, exactly the same as Intel and exactly as scummy, make no mistake there. But I have a feeling you just ignore the scummy stuff AMD did. Man, fanboys really are something else...

 

[waltc3]

Intel apologists...always highly amusing...

 

[KyaraM]

Intel apologists...always highly amusing...

AMD fanboys. Just sad.

Btw, stating that all big companies are crap isn't being apologist. It's not being a moron. However, acting as if AMD is better is being apologist.

 

[COLGeek]

Civility and stay on topic please. Corporate accounting has much to do with this situation and ALL companies do this.

Be nice to each other. Friendly warning.

 

[spongiemaster]

Irrelevant. Intel has been leaking share steadily for years like a sieve. At a time when AMD's CPU profits are soaring, Intel is losing money in its CPU division. Should this continue for another few years, Intel will become an historical footnote. I would bet AMD does in fact do "significantly better" this quarter.

Back to reality. Intel's CPU division is not losing money. CPU's are still exceedingly profitable. Intel lost money last quarter due to bleeding off money elsewhere (Optane) and the significant amount of money they are spending to increase production capacity (which is where the CHIPS act comes in to offset some of that).

 

[InvalidError]

Back to reality. Intel's CPU division is not losing money. CPU's are still exceedingly profitable. Intel lost money last quarter due to bleeding off money elsewhere (Optane) and the significant amount of money they are spending to increase production capacity (which is where the CHIPS act comes in to offset some of that).

Even without the CHIPS act, Intel still has enough income to cover the cost of a new cutting-edge fab or three if it really wanted them. The free money to expand in the USA is mainly corporate congress swamp monsters providing a return on investment to their corporate overlords.

 

[spongiemaster]

Even without the CHIPS act, Intel still has enough income to cover the cost of a new cutting-edge fab or three if it really wanted them. The free money to expand in the USA is mainly corporate congress swamp monsters providing a return on investment to their corporate overlords.

Or leveling the playing field when Japan, Taiwan, Germany, and Narnia are all writing huge checks to get companies to build fabs in their neck of the woods. Did you see, both Samsung and TSMC (and the Taiwanese gov't) are asking for money from the CHIPS act? TSMC is even threatening to slow the completion of their Arizona fabs without subsidies. That's how this game is played.

 

[TerryLaze]

TSMC is even threatening to slow the completion of their Arizona fabs without subsidies. That's how this game is played.

It's not a thread, intel is saying the same thing, it just takes longer without the subsidies because no company is willing to take 100-200 bil out of their treasuries all at once, they are going to spread that out so it will take longer to complete.

 

[Maikk]

Uhm. You are aware that Intel still holds over 60% of the CPU market share, yes?
https://www.cpubenchmark.net/market_share.html

Sales might be a somewhat different story, but I wouldn't hold my breath about AMD doing significantly better this quarter.

Not included Arm chips are fail for the research, apple is growing 40% in the market is crises.

 

[KyaraM]

Not included Arm chips are fail for the research, apple is growing 40% in the market is crises.

I have genuinely no idea what you trying to tell me there. Are you implying that Apple CPUs make up 40% of all desktop chips or something? I got a rude awakening for you if that's the case...

 

[Deleted member 14196]

Just remember the bigger they are the harder they fall

 

[TerryLaze]

Just remember the bigger they are the harder they fall

This isn't a boxing match between people...
Not everything is capable of falling.
The pyramids have been around for 4.500 years and will never fall, they are incapable of falling, they will maybe erode away in many years.
And the same goes for intel, they are so huge that any falling they'd be doing would be over many many years because they have so much money that they can keep going for decades without making any money at all.
Heck AMD went on for years AFTER having no money...