News Intel Q1 2021 Earnings: PCs Up, Data Center Revenue Plummets

[Admin]

Intel's first quarter saw record notebook PC sales but also a sharp decline in server chip sales.

Intel Q1 2021 Earnings: PCs Up, Data Center Revenue Plummets : Read more

 

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PC sales had been down for the better part of a decade before covid, sales being down now relative to last year's bumper sales was inevitable. Losing a chunk of the enthusiast/higher-end to AMD doesn't help either.

 

[Co BIY]

- "cloud inventory digestion" - I did not predict that I would read that today.

 

[watzupken]

PC sales had been down for the better part of a decade before covid, sales being down now relative to last year's bumper sales was inevitable. Losing a chunk of the enthusiast/higher-end to AMD doesn't help either.

It is not just AMD that is causing the damage. ARM is also a very capable challenger in the data center space. With big corporates looking to design their own custom SOC using ARM technology, the use of Intel's chip is likely going to drop further. Intel can counter this by reducing price, which I am sure they are already doing so. AMD is giving Intel double headache since they offer better value for more superior products.

 

[thGe17]

"DCG operating margins weighed in at 23%, a record low for a segment that typically runs in the 40% range, ..."

Correction: The author has most likely missed nothing, as stated before.
DCG Op Inc dropped but the large global drop in Op Inc is related to the VLSI lawsuite, where Intel has "withdrawn" 2,2 billion US$, as can bee seen in the GAAP vs. Non-GAAP sheets (-2,209 billion US$ for "Restucturing and other changes").

"After consideration of the verdicts in the WDTX cases and the additional pending lawsuits filed by VLSI, Intel accrued a charge of $2.2
billion in the first quarter of 2021. We dispute VLSI’s claims and intend to vigorously defend against them."

"The second Texas case went to trial in April 2021, and the jury found that Intel does not infringe the ‘522 and ‘187 patents. The third case is scheduled for trial on June 7, 2021, and VLSI seeks over $1.9 billion for alleged infringement of the ‘983, ‘025 and ‘485 patents, plus enhanced damages for willful infringement."

So if Intel wins at the end, the money will be put back in the balance sheet as a "one-off earning".

 

[dalek1234]

Sounds like shorting Intel stock would have been a good idea. Than again, I don't foresee Intel's downward spiral to stop anytime soon. AMD, on the other hand, has just reported an impressive quarter on all fronts. When trading resumes later on today, we will probably see AMD stock price go up.