Intel reverses fortune with a return to profitability

28 Jul 2023

Image: © JHVEPhoto/

The chip manufacturer has boosted its Foundry Services division and appears to be focused on the AI sector.

Intel has managed to turn a quarterly profit, reversing the slump the company experienced in the previous two quarters.

The company’s revenue for the second quarter of the year was $12.9bn, a decline of 15pc compared to the same period last year. Intel has been suffering from the ongoing slump in PC sales, which has impacted its earnings for multiple quarters.

But the chip manufacturer saw its net income reach $1.5bn for the latest quarter under generally accepted accounting principles, up from the $0.5bn loss in 2022. This marks a reversal of fortune for Intel, which saw both revenue and profits slump in the previous two quarters.

Intel CEO Pat Gilsinger said the results exceeded the “high end of our guidance” and that the company is executing its “strategic priorities”. The company’s shared have been on the rise since the earnings were released.

“We are also well-positioned to capitalise on the significant growth across the AI continuum by championing an open ecosystem and silicon solutions that optimise performance, cost and security to democratise AI from cloud to enterprise, edge and client,” Gilsinger said.

The company has been working to “aggressively” address costs since last October, with a goal of reaching $3bn in cost reductions for 2023 and cutting roughly 120,000 jobs worldwide, including 5,000 in Ireland.

Intel began 2023 with a bleak outlook, after suffering a revenue loss towards the end of 2022. At the time, Gelsinger said Intel had “stumbled” and “lost momentum”, but believed the company would stabilise this year.

“Strong execution, including progress towards our $3bn in cost savings in 2023, contributed to the upside in the quarter,” said Intel CFO David Zinsner. “We remain focused on operational efficiencies and our Smart Capital strategy to support sustainable growth and financial discipline as we improve our margins and cash generation and drive shareholder value.”

The company isn’t out of the woods yet however, as revenue remains down in almost all divisions compared to the same quarter last year.

One objective that is being achieved is the focus on Intel’s Foundry Services division, which handles the manufacturing of semiconductors. This division saw revenue rise by 307pc in the latest quarter, reaching $232m.

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Leigh Mc Gowran is a journalist with Silicon Republic