News Intel Posts Largest Loss in Years as PC and Server Nosedives

[Admin]

Intel's sales are expected to go even lower as its customers prep to aggressively clear out inventory in Q1.

Intel Posts Largest Loss in Years as PC and Server Nosedives : Read more

 

[InvalidError]

It shouldn't surprise anyone that the ~100M extra units surge sold to corporations and people for out-of-cycle COVID upgrades would come at the expense of depressed sales for the following 3-10 years until everyone's periodic refresh cycles resume. Inflation from the COVID cash injection bubble and economic uncertainty on top don't help either.

 

[watzupken]

All the tech companies that fattened themselves up over the last 3 years are in for lean times. I have doubts over the profitability of Intel in the foreseeable future. Competition is fierce and they don't seem to have any edge over their competitors like they used to. Also the decision to triple down creating or expanding fans with all their fab competitors doing the same is going to drag them down in my opinion. I feel a lot of capacity will be created, though I am not sure red hot chip demand can sustain.

 

[prtskg]

All the tech companies that fattened themselves up over the last 3 years are in for lean times. I have doubts over the profitability of Intel in the foreseeable future. Competition is fierce and they don't seem to have any edge over their competitors like they used to. Also the decision to triple down creating or expanding fans with all their fab competitors doing the same is going to drag them down in my opinion. I feel a lot of capacity will be created, though I am not sure red hot chip demand can sustain.

Makes one wonder what kind of magic does that leather jacket user does at Nvidia to get greater than 60% gross margin again and again.

 

[TechieTwo]

Makes one wonder what kind of magic does that leather jacket user does at Nvidia to get greater than 60% gross margin again and again.

He charges $1500 for a video card and some people are willing to pay those prices.

 

[PlaneInTheSky]

The reason I am not "upgrading" my PC is two-fold.

1) The price of GPU and motherboards is insane. I am not about to pay $600+ for a midrange GPU or $300+ for a midrange motherboard. These prices need to be halved and the power usage of GPU needs to come down drastically too.

2) "AAA" games have sucked for a while now. Death Stranding. Sonic Frontiers. Forspoken, these games just blow. The most fun I am having is with smaller games that run on a potato.

 

[TechieTwo]

Intel was somewhat isolated from economic downturns in the past when they had a large installed base and controlled the CPU playing field. Since AMD's EPYC processors have taken significant market share from Intel, Intel has had to lower prices and use a lot of "marketing" money to create sales. Even Dell which has always been an Intel house has had to switch to AMD's EPYC systems to meet enterprise demand.

Intel also has a habit of buying smaller companies with new tech and then managing to run them into the ground and shuttering them after a few years. That can eat up a lot of capitol.

 

[suryasans]

People with higher disposable income think that a glowing big brick in their 2 grand diy PC is cool.

 

[Deleted member 14196]

Ruh roh

 

[Fates_Demise]

Makes one wonder what kind of magic does that leather jacket user does at Nvidia to get greater than 60% gross margin again and again.

Nvidia is also the world leader in AI computation cards by a large margin. A very large portion of sales are from workstations.

 

[Fates_Demise]

The reason I am not "upgrading" my PC is two-fold.

1) The price of GPU and motherboards is insane. I am not about to pay $600+ for a midrange GPU or $300+ for a midrange motherboard. These prices need to be halved and the power usage of GPU needs to come down drastically too.

2) "AAA" games have sucked for a while now. Death Stranding. Sonic Frontiers. Forspoken, these games just blow. The most fun I am having is with smaller games that run on a potato.

People don't really care about the power consumption (yet), nobody goes home whining about oh man... my computer is sucking down a extra 100 watts while I'm gaming vs my last computer.
What they do care about is the extra performance that allows.

 

[TerryLaze]

(In Millions, Except Par Value; Unaudited)

Dec 31, 2022​

Dec 25, 2021​

Property, plant and equipment, net

80,860​

63,245​

Retained earnings

70,405​

68,265​

They spend 17bil for FABs
put 2 more bil under the mattress
and they still made 8bil net income for the full 2022...
They are doing fine.

They are not taking the money for the expansions from the mountain of gold but from the running business which is why it looks bad if you are only looking at the main numbers.

 

[InvalidError]

People don't really care about the power consumption (yet), nobody goes home whining about oh man... my computer is sucking down a extra 100 watts while I'm gaming vs my last computer.
What they do care about is the extra performance that allows.

Apart from the enthusiasts, I think more normal people will actually care that the next step up in GPUs costs $200-400 extra over the similar tier on the previous generation and requires a new $200-300 PSU on top before they have to worry about the increased power bills.

If you cannot afford the power bills, you likely cannot afford the hardware that would bring significantly higher power bills in the first place.

An even bigger slice of the market simply buys the best performance-per-dollar they can fit within their budget and most stuff within a reasonable cost-conscious buyer's striking distance consumes far less power than bleeding-edge stuff.

 

[Elusive Ruse]

A few quotes from Pat that is not mentioned in this article:
"We stumbled, right, we lost share, we lost momentum. We think that stabilizes this year,"
"We expect some of the largest inventory corrections literally that we've ever seen in the industry taking place that's affecting the Q1 guide in a meaningful way," he said.
"Everything hinges on the PC market recovery. AMD isn’t immune to this either," said Wayne Lam, an analyst at CCS Insight.
"Don’t think we’ve seen the bottom for INTC...They are not running a sustainable business model."

 

[Amdlova]

People don't really care about the power consumption (yet), nobody goes home whining about oh man... my computer is sucking down a extra 100 watts while I'm gaming vs my last computer.
What they do care about is the extra performance that allows.

I care about power. Gaming on s22 ps2 ps1 and game cube with dex on a led projector. 75w setup (10w for dex and Phone and 65w for the led projector.) The another system for browser and light work is a lenovo 70q with a 10500t (90w max but what I use only draw 20w of power) and the third system is a 2696v3 turbo unlocked can draw about 300w. Every watts count...

 

[PlaneInTheSky]

People don't really care about the power consumption (yet), nobody goes home whining about oh man... my computer is sucking down a extra 100 watts

Oh people certainly care about PC power consumption in Europe.

Electricity costs about 3 times more in Germany, Belgium and Denmark than it does in the US. Countries with lower average wages than the US.

A 600 watt gaming PC in the US is comparable to a 1800 watt PC in Germany in terms of electricity costs. If you run one of those i7/i9 and a 4080/4090, you would get a very high electricity bill in Germany.

 

[kjfatl]

A few quotes from Pat that is not mentioned in this article:
"We stumbled, right, we lost share, we lost momentum. We think that stabilizes this year,"
"We expect some of the largest inventory corrections literally that we've ever seen in the industry taking place that's affecting the Q1 guide in a meaningful way," he said.
"Everything hinges on the PC market recovery. AMD isn’t immune to this either," said Wayne Lam, an analyst at CCS Insight.
"Don’t think we’ve seen the bottom for INTC...They are not running a sustainable business model."

It is interesting that the company can lose money when operating margins are at 39%. This is the big reason that semiconductor companies think twice about investing is multiple $20Billion fabs. The $20Billion fabs are also a big part in lowering power consumption. This is life as usual for the Boom/Bust cycle of the semiconductor industry.

 

[Lorien Silmaril]

time to revisit that thing about AMD being in the rear view mirror.

I am sure AMD got hit too but phew, their margins aren't THAT bad.

 

[Fates_Demise]

Oh people certainly care about PC power consumption in Europe.

Electricity costs about 3 times more in Germany, Belgium and Denmark than it does in the US. Countries with lower average wages than the US.

A 600 watt gaming PC in the US is comparable to a 1800 watt PC in Germany in terms of electricity costs. If you run one of those i7/i9 and a 4080/4090, you would get a very high electricity bill in Germany.

Yea i guess if your country is massively higher electric cost than other parts of the world then i could see that. Id still expect that overall its a much smaller percentage of people that are bothered by that.

 

[Makaveli]

Makes one wonder what kind of magic does that leather jacket user does at Nvidia to get greater than 60% gross margin again and again.

There users are happy to pay $1500-$2000 for his GPUs and will sleep in a tent in front of best buy to do it. That is his magic!

 

[shady28]

(In Millions, Except Par Value; Unaudited)

Dec 31, 2022​

Dec 25, 2021​

Property, plant and equipment, net

80,860​

63,245​

Retained earnings

70,405​

68,265​

They spend 17bil for FABs
put 2 more bil under the mattress
and they still made 8bil net income for the full 2022...
They are doing fine.

They are not taking the money for the expansions from the mountain of gold but from the running business which is why it looks bad if you are only looking at the main numbers.

That's the reality of it but few take the time to look into the numbers.

Intel's R&D has increased by 4B / year vs 2019. That's in addition to the capital investments they're making in new fabs, and those fabs haven't made a dime yet.

IFS is the thing to watch though, now that Mobileye has been spun off. So far they've taken it from zero to almost 900M/year business in 2 years, but at Q4 revenue run rate are running ~1.2B/ year in that business with a 30% growth rate. IFS is already about half the size of Mobileye, and this is really their first real revenue year in that business.

While everyone wants to compare them to TSMC, they don't have to beat TSMC in foundry services to score a big win here. GloFlo for example does ~2B/quarter in revenue, and Samsung's foundry does over 5B/quarter.

 

[TinyFatMan]

Companies like to play with numbers. In addition, Intel is part of the lot. A good strategy to get rid of jobs, even if in the end it is the people who pay for them, is to say, "Everything is bad". That the profits, instead of being 1000%, are "only" 500%.

Then no companies are going to say that they are replacing employees with robots. What propagandists, “journalists”, call “AI” (you do not have to know anything about programming to say that).

Of course, the companies, which proclaim themselves “private”, do not stop asking billions from the “governments” (which do not exist), that is to say their friends the politicians. After all the main role of politicians, in addition to making themselves richer, is to enrich companies.

Intel, like Microsoft, never saw the usefulness of smartphones. Yet there are more than four billion in the world. Like what, we can have billions in tax havens, be champions in the most diverse shenanigans that does not make it more brilliant.

In addition, Intel, which will receive handsome billions from the “government” supposedly for jobs, while the majority will accumulate with the other billions in tax havens.

Why sell products or services at the price it costs, therefore manufacture to the public, when you can sell it for 1000% or more of its real value to the “private”. In addition, people are buying. They just have to look at NVidia and AMD with their graphics cards.

Moreover, to pay two billion each for a useless B2 bomber.

No money for health, education, housing, food, but billions for the multinationals, which have already accumulated billions in tax havens. In addition, less and less jobs. Nice!

 

[coolitic]

Apart from the enthusiasts, I think more normal people will actually care that the next step up in GPUs costs $200-400 extra over the similar tier on the previous generation and requires a new $200-300 PSU on top before they have to worry about the increased power bills.

If you cannot afford the power bills, you likely cannot afford the hardware that would bring significantly higher power bills in the first place.

An even bigger slice of the market simply buys the best performance-per-dollar they can fit within their budget and most stuff within a reasonable cost-conscious buyer's striking distance consumes far less power than bleeding-edge stuff.

I personally don't appreciate turning my room into a sauna, coil whine, and having loud fans (offset by water-cooling, at higher costs)... all coming from overly high power-usage. My way of buying CPUs and GPUs now is to find the best performing one under a certain TDP, and seeing if it's a worthy enough upgrade over my current one for the price. (so I don't really care if it's "mid-range" or "high-end" for a specific generation, just the relative difference for the price)

 

[letmepicyou]

Am I the only one that would like to see Intel get rid of their ARC spy cpu built into our hardware?

 

[waltc3]

I'll be buying an AM5 7000-series X3D CPU as soon as they are available, most likely. Along with a new mobo and DDR5. My 6900XT should continue to give good 4k service for sometime to come.