Impacted by lower PC sales, CEO Pat Gelsinger blamed the results on a ‘rapid decline in economic activity’ and ‘execution issues’, but said the CHIPS Act is promising.
A sharp drop in the number of people buying PCs has caused a fall in demand for chips, impacting Intel in its latest quarter.
The chip giant’s revenue fell 22pc to $15.32bn. This was far behind analyst expectations of $17.92bn, according to Refinitiv.
It also reported a net loss of $454m.
Intel Foundry Services revenue was down 54pc in the second quarter compared the same period last year. Revenue in its Client Computing Group, which supplies PC makers, was down 25pc to $7.7bn.
Its data centre and artificial intelligence business saw revenue fall 16pc from last year to $4.6bn.
CEO Pat Gelsinger said the results were “below the standards we have set for the company”.
“We must and will do better. The sudden and rapid decline in economic activity was the largest driver, but the shortfall also reflects our own execution issues,” he added.
Intel also announced that is is winding down its Optane memory business, the chip giant’s effort to create a new tier of memory that has underperformed financially. The move is part of a broader attempt by Gelsinger to end some non-core businesses at Intel.
Shares dropped 10pc following the publication of the results and forecasts, according to Reuters.
While the chips may be down, Intel is currently looking to expand its manufacturing capacity in the US and Europe.
Something that is slated to help is the $280bn CHIPS and Science Act passed in the US Congress yesterday (28 July), $52bn of which is funding for domestic semiconductor manufacturing.
Gelsinger welcomed the CHIPS Act and noted it would play a role in helping Intel build its latest chip plant in Ohio, which will potentially be the world’s largest semiconductor manufacturing site by the end of the decade.
Congratulations to the House and Senate for voting to approve #CHIPSAct funding. This investment will shape the future of America’s leadership in semiconductor manufacturing and innovation. We are excited to move full speed ahead to start building #IntelOhio!
— Pat Gelsinger (@PGelsinger) July 28, 2022
Ajit Manocha, CEO of chips industry association SEMI, the incentives will help ensure “the competitiveness and resiliency of the US semiconductor ecosystem”.
“[It] will be instrumental in bolstering semiconductor manufacturing and R&D along with a wide range of technology-reliant US supply chains, create thousands of high-skill jobs and keep pace with incentive programmes around the world.”
Updated, 2.20pm, 29 July 2022: A previous version of this article incorrectly stated that this was Intel’s first loss in 30 years.
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