Chips are up as Intel reports US$11.5bn fourth quarter

14 Jan 2011

In what has been the best year in chip manufacturer Intel’s history, 2010 revenues reached US$43.6bn, yielding the company a US$11.7bn profit for the past year. The company’s fourth quarter revenues were its highest yet at US$11.5bn.

“(The year) 2010 was the best year in Intel’s history. We believe that 2011 will be even better,” said Paul Otellini, Intel president and CEO.

For the fourth quarter, Intel posted revenue of US$11.5bn. The company reported fourth-quarter operating income of US$4.3bn, net income of US$3.4bn, and earnings per share of 59 cents. Fourth-quarter revenue, operating income, net income, and EPS were also all records in the company’s history.

The company reported full-year revenue of US$43.6bn, operating income of US$15.9bn, net income of US$11.7bn, and EPS of US$2.05 – all records. The company generated about US$16.7bn in cash from operations, paid cash dividends of US$3.5bn, and used US$1.5bn to repurchase 70m shares of common stock.

Ingredients of Intel’s success

Last week, at the Consumer Electronics Show in Las Vegas, Otellini said strong demand for the company’s chips, particularly in the PC sector where machines are selling at the rate of 1m a day, were key factors in its continued success.

He said that the company, which employs around 4,000 people in Ireland, envisages that the success of its Atom, as well as its 2nd Generation Intel Core processor, will play a significant role in enabling the PC industry worldwide to reap revenues of US$125bn collectively.

Describing the impact its 2nd Generation Core processor ‘Sandy Bridge’ will have, Otellini said: “This is the world’s most advanced 32nm chip technology,” Otellini explained. “It is the first 32nm graphics and media chip in the industry. It can do the things discrete media can’t do, it can also do fast transcoding.”

The 2nd Generation Intel Core processor, Otellini said, features deep integration with Windows 7 and the future Windows 8 operating system. He said Intel is working on 20 new processors and has more than 500 new design wins for laptops and desktops.

“To give you a scale, in 2011 alone Sandy Bridge will represent one-third of Intel’s corporate revenues. In the year ahead, Intel will generate $125bn for the PC industry,” Otellini said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years