Something I look forward to: It appears that Intel is making steady progress in 10nm production and 7nm development. Component and substrate shortages may lead to fewer processors being made in the coming months, but CEO Pat Gelsinger is hopeful the tipping point will come later this year. Meanwhile, Intel has beaten financial estimates for the second quarter of 2021, as revenue grew 2% to $ 18.5 billion.
Intel is optimistic about its outlook for 2021. The company reported Second quarter net revenue of $ 5.1 billion on revenue of $ 19.6 billion. This is higher than Wall Street’s expectations of $ 18.5 billion in earnings, and the company now projects stronger non-GAAP revenue of $ 73.5 billion for 2021.
CEO Pat Gelsinger says that the semiconductor industry has seen tremendous growth thanks to the accelerating “digitization of everything” and that this trend will likely persist for the next ten years as people and businesses increasingly turn to models. hybrid workstations.
The pandemic has driven demand for desktops and laptops, and Intel believes its newer Evo-branded CPUs have a good chance of capturing a good chunk of the 400 million people expected to upgrade their systems in the next few years. years. On the other hand, the most recent data from IDC indicates that demand is already decelerating as restrictions are eased.
PC processor sales were up 33 percent year-over-year, which is why Intel’s Customer Computing Group generated a record $ 10.1 billion in revenue in the second quarter, up 6 percent from the quarter. same period last year. However, the average selling price of the chips declined as a result of a combination of factors, including high demand, chip shortages, and fierce competition from AMD in the gamer and enthusiast markets. After all, Intel cut prices for 10th-gen core processors to alienate buyers from AMD’s options, but it still ended up selling more processors with lower core counts.
Gelsinger is optimistic about the semiconductor shortage and expects it to bottom out in the coming months. He also believes it will be up to two years before the industry can “fully catch up with demand.”
Intel’s data center group posted revenue of $ 6.5 billion, representing a 9% decline year-over-year. The Non-Volatile Memory Solutions Group raised $ 1.1 billion, representing a 34 percent year-over-year decrease. Intel is currently in the process of selling its NAND memory business to SK Hynix, but until that deal is finalized, it still has the potential to taint Intel’s financial reports and business projections.
The IoT and Mobileye business units have risen year-over-year. The former is up 47 percent, while the latter is up 124 percent to generate a record $ 327 million in revenue.
On the other hand, Intel says that “7nm is progressing well” and that it will start shipping large orders of Alder Lake chips to its partners in the coming months. The company has already shipped 50 million Tiger Lake processors to date, but it doesn’t expect to be able to keep getting them up and running as easily in the third quarter due to ongoing component and substrate shortages.
Intel promised to reveal more about its packaging and process roadmaps soon. Last year the company had to admit that the schedule to develop a 7nm process node was being pushed back, but the company promised to fix fabulous problems and enlisted Pat Gelsinger to make sure it happens sooner rather than later.
Gelsinger established what he calls the “IDM 2.0” strategy, which aims to regain the crown of the “undisputed” industry leader in process technology. So far, Intel has managed to increase its 10nm wafer output to the point where it now exceeds 14nm wafers. As 10nm wafer production increases, it will cost 45% less to manufacture than a year ago, which is great news for the company’s bottom line.
In the coming years, Intel hopes to make chips for other companies under a separate organization called Intel Foundry Services that will report directly to Gelsinger. The company is also building two 7nm factories in Arizona and upgrading a third in New Mexico to make advanced semiconductor packaging technologies, and we’ll no doubt hear more about them at the “Intel Accelerated” event next week on July 26.