Intel, Samsung boast record 2021 revenues but supply crunch looms

27 Jan 2022

Image: © piter2121/Stock.adobe.com

2021 was a good year for Intel and Samsung amid supply ‘uncertainties’. Meanwhile, Qualtrics crossed $1bn in revenue for the first time and Tesla shifts gears.

US chipmaker Intel and South Korean electronics giant Samsung have reported record-breaking fourth-quarter and full-year revenues in 2021.

However, the first quarter of 2022 may not be smooth sailing for the two tech giants as supply chain headwinds worry executives and shareholders alike.

Future Human

Intel reported the highest revenue in the company’s 53-year history, with adjusted figures up 2pc over the previous year to $74.7bn. It also set a record in the fourth quarter of the year, with revenue of $19.5bn – up 4pc year on year and beating company expectations by $1.2bn.

But the company’s earnings fell by 27pc last quarter as it ramped up spending on facilities and products. Further investment is expected in the coming years as Intel plans to develop what could be the world’s largest semiconductor manufacturing site by the end of the decade.

Recent revenue growth was spearheaded by Intel’s data centre business, where revenue was up 20pc to $7.3bn in Q4. Revenue in its internet of things segment was also up 36pc year on year to $1.1bn. Mobileye, Intel’s autonomous driving business set to go public this year, was up 7pc to $356m.

Pat Gelsinger, chief executive of Intel, hailed the results as “a great finish to a great year”, reflecting the company’s “disciplined focus on execution” across technology development and manufacturing as well as its traditional and emerging businesses.

He was also happy about Intel’s victory yesterday (26 January) over a billion-dollar antitrust fine from the European Commission that was overturned. “The semiconductor industry has never been more competitive than it is today, and we look forward to continuing to invest and grow in Europe,” he said on a call with investors.

However, Intel is concerned about the ongoing global supply chain constraints and its impact on the first quarter of the new year. Gelsinger said that unprecedented demand for its data centre services “continues to be tempered by supply chain constraints”.

“Across the industry, this was most acutely felt in the client market, particularly in notebooks. But constraints have widely impacted other markets, including automotive, the internet of Tthings and the data centre,” he added.

Reuters reported that shares in Intel initially fell about 3pc after the earnings announcement yesterday, but later recovered after the company said it was confident in its ability to manage the supply chain issues.

Samsung

Samsung also broke quarterly and annual revenue records, driven by strong demand for consumer electronics such as smartphones as well as its semiconductor business.

The company reported Q4 revenue of 76.6trn won (around $68.3bn) which represents growth of 20pc over the same period in 2020. Operating profit was 13.9trn won (around $11.6bn) – a growth of 53pc year on year.

Just like Intel, Samsung is anticipating “lingering uncertainties to persist” with supply chain constraints.

However, it is confident it about continued revenue and profit growth, “led by new flagship model releases and higher sales of mass market 5G smartphones as well as tablets and wearables”. This includes its new Galaxy S smartphone expected to be revealed February.

Tesla and Qualtrics

Elon Musk said 2021 “was a breakthrough year” for his EV manufacturing giant Tesla, as it saw deliveries shoot up by 87pc. The company generated more than $17.7bn in revenue in its fourth quarter with net income of more than $2.3bn.

In the full year, Tesla saw its revenue rise by a whopping 71pc over 2020 to exceed $53.8bn, while its net income was $5.52bn.

“There should no longer be doubt about the viability and profitability of electric vehicles,” Tesla wrote in a statement. “We aim to increase our production as quickly as we can, not only through ramping production at new factories in Austin and Berlin, but also by maximising output from our established factories in Fremont and Shanghai.”

Meanwhile, Qualtrics reported that its total revenue tipped over the billion-dollar mark for the first time – up 41pc over 2020. In its fourth-quarter results, the US experience management software giant reported revenue of $316m – up nearly 50pc year on year.

“Q4 was an outstanding quarter, capping off a record year of growth for Qualtrics,” said chief executive Zig Serafin. “Not only did we cross the $1bn revenue milestone, but we’re accelerating past it, as experience management becomes even more critical to business success.”

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Vish Gain is a journalist with Silicon Republic

editorial@siliconrepublic.com