Revenue down 22%.
Edit: Oh and it gets better... Intel posted a loss!
Intel has spent the last 15 years or so making a lot of really bad decisions. I'm just a little surprised it took this long to catch up with them. And why the chips act thing is a bad idea. Make taxpayers pay for their bad behavior? Reward being selfish and short sighted, with no consequences? Ugh.
This is true. I wrote about this recently. We're entering a very, very difficult period.This drop isn't an Intel-only issue. Both Meta and Apple are showing considerable revenue declines. Also Intel's client is affected more. Why is that if competitiveness and product was the only factor? This is indeed a macroeconomic issue.
Of course with PC's it's expected as the increase was due to artificial lockdowns.
There's always a delay between action and consequences. That's why in the short term stock prices are no indication of the health of the company.
Also they were revenue stagnant until 2009 when they brought the Core ix branding. The revenue shot up 20% that year. For reaching the average consumer that marketing was very effective. Telling all the technical details may make sense to us, but not for selling. The average people basically have no time or interest and want the decisions to be made easy.
I bet after this the foundation of the company will be much more stable. Again they probably won't be the investor's choice as before but there definitely is a tradeoff since things like dividends and buybacks directly benefit share prices but hinder the company from investing for the future.
True. The only surprise was how long it actually took till it caught up. I guess the pandemic was actually good for intel with many people buying laptops + services like online meetings needing to scale up (= server sales). So the numbers from 20 and 21 were likley a bit inflated.I don't want to say "I told you so" but I have been pointing out for the last year or two that Intel has terrible progress/competitiveness in server, and even desktop is weak, and I said it will eventually catch up to them. Well, this is the first evidence that I was right.
Their guidance for the whole year of 2022 is now $8-11B lower than it was three months ago. That's not just a "fab" related thing. They would have known that already back in April.Well CHIP went through and even before that intel was building new facilities like nobodies business.
Taxes are super high for some reason and all the other expenses are for buying up equipment and building stuff.
Net income isn't that bad, it's the expenses that drag it down, well FABs don't build themselves.
I was specifically referring to DC and not the overall numbers.By losing by A Whole Lot more in Client...!
The whole market itself is growing - not only CPU related though if you're looking at NV. That's what I'm wondering why Intel's numbers are so horrible. Sure, AMD will be a factor in that. But can't be all of it.How can it be growing a lot while its down 15% Y/Y ????
Apple mostly blamed currency issues but Tim Cook specifically claimed that Mac and iPad were hampered by supply issues brought on by lockdowns in Shanghai.
It will be.Of course it is. Braindead and short sighted decisions coupled with malice on top is what got there in the first place. It's looking similar to 2008 but this is likely going to be far worse.
The leak in Shanghai is a forebringer for things to come. Your computers will be garbage if you are running out of food.
100% this. AMD cannot supply the entire server market by themselves, so given the once in a century demand for all things semiconductor, everyone wins even those with fundamentally inferior products. However, when demand drops, it doesn't drop equally. It drops for the inferior products first and the best products last. As the quote goes, the tide receded and Intel was caught swimming completely naked. What's even worse for them is that their design side has always been the ones keeping their fab side afloat. Now that the design side cannot maintain the same profit levels, it will be much harder to keep their foundry business successful, hence opening up their fabs so that others can keep the volumes high when their products alone cannot do it. The foundry business has become the albatross around their necks, and it's a vicious cycle / positive feedback loop that's hard to get out of. If I were an Intel investor, I would be crapping my pants right about now. I would say goodbye to positive cash flow for a while and just pray that they don't cut the dividend. If Intel does cut the dividend in favor of stock buybacks, that won't look good to the public either, especially when the US government just gave them a multi-billion dollar life jacket.Intel's drop is much steeper than Apple. Intel's competitiveness in the server market combined with covid demand for low-end processors that only they could provide made the drop so severe.
AMD took all of the high-margin business - I assume the demand is even higher due to increased energy prices in the data center. Because Intel had massive capacity, there were able to bring in massive business from the consumer and laptop market during covid. That left them highly exposed to the cooling consumer market. And since energy efficiency is so important for the cloud, no one is going to want to use Intel if AMD has a way lower TCO when AMD can meet demand. In addition, AMD increased its substrate capacity recently, and AMD's Xilinx is also crushing Intel with high-margin products.
If Intel was competitive in the growing data center market, the drop would be nowhere near as severe.
AMD's Q2 earnings report is on August 2nd (next Tuesday).
The thing about AMD's growth so far is that its supply so far was dwarfed by the market demand, to the point AMD was essentially able to plan a steady high growth since it knew it wouldn't be able to satisfy all demand for quite some time to come despite all the growth. Now that market demand is going down, also for AMD, but when will AMD hit the point its supply matches or surpassed the actual demand? I think that's still off for some time, especially with the next gen of server chips being around the corner.I will be very surprised if AMD hits numbers like they did in Q1 2022. It would be great if they’re impervious to the market forces that are hurting Intel, but I’m not holding my breath.
I sure wish less customer had wanted that though, as thin and light has led to all kinds of straight-to-landfill anti-consumer and anti-repair things like soldered RAM, glued in batteries and soldered SSDs (the latter madness is thankfully mainly an Apple thing for now).You mean the Ultrabook concept that Intel announced in 2011, THREE YEARS after Apple introduced the Macbook Air, for which Apple had to ask Intel to create a different CPU packaging form factor just for them?
My impression at the time was that it was OEMs who wanted to sell thin and light laptops to compete with the Air who pressed Intel to create a platform for them, not some guy at Intel coming up with the "concept" and creating the market.
The Ultrabook is a great example of Intel leading from behind, and having no clue what consumers want but having to be pushed into the future kicking and screaming.
Well, the data is here, and its another record quarter for AMD , so you are wrong. 70% growth Y/Y ? Thats insane.Again, I will be pleasantly surprised if AMD’s quarter is any good. From all evidence channel inventory is backed up, which means fewer orders from customers. Maybe that impacts them next quarter instead, we’ll see. Keep in mind that in order to justify its valuation, AMD needs to show rapid year on year growth. It’s taking share from Intel, but is that enough to counter market reality post pandemic? I doubt it.
Y/Y 37% lower net income with 70% higher revenue...record quarter...That really IS insane.
Phew, what do you guys think, does this operating expense increase already include a bunch of new ZEN 4 production?
Net income ($M) $447 $710 Down 37%
Because if that is still to come it's not going to be pretty.
Operating expenses ($M) $2,508 $1,000 Up 151%
It is Q2 related only due to Amortizations regarding the Xilinx acquisition. See Appendices in the slide presentation.
There's a reason for GAAP (Generally Accepted Accounting Principles) vs non-GAAP (i.e. not generally accepted).
If you use non-GAAP numbers, you're subject to how they decided to amortize asset depreciation. Things like 'intangible' asset depreciation in particular is dubious. Any company can basically make their numbers look better or worse for a number of quarters using non-gaap accounting tricks.
This is not something BTW that plays well into Intel's hand. Ex accounting tricks, Intel lost 0.11c per share and and a net income of -$500M,
If you are using Non-GAAP numbers, Intel made 0.29c/share and $1.2B.
I think it's obvious that this is not reflective of reality. I find Non-GAAP numbers to be highly deceptive.
While non-GAAP allows businesses to play some silly games some times with the numbers, AMD GAAP vs non-GAAP numbers typically are very close, if not exactly in line with one another. The main reason they are not this quarter is because of acquisition costs related to XLNX and Pensado. AMD offering non-GAAP numbers lets investors see how the actual business did in the quarter if you take out those temporary added costs and AMD did very well. Intel clearly lost market share (x86) to AMD this past quarter due to a much greater exposure in markets that shrank significantly as well as being behind in product competitiveness in non-high power mobile and especially server.
Getting SPR finally out will help Intel slow the bleeding a bit but they will still be the follower in the server space for at least a couple more years. In a shrinking market, it really hurts to not be the technology leader, especially when you are by far the volume leader. Intel benefited by being the volume leader during / right after the pandemic because the demand exploded and Intel could use their volume dominance to feed the market even though they were the tech follower. Now with the demand pull back, that position has kind of come back to bite Intel in the butt for at least the next few months.
I think everyone will feel some effect of the market going into next year but beyond that, who knows what will happen in the macro environment.
I wasn't necessarily trying to claim Apple invented the category - they are the best there is at being a "better follower" and taking something others have done half assed and refining it into something people want. That's what the iPod, iPhone, and iPad are after all.
I was just replying to the claim that some guy at Intel (who the poster thought would have done a better job as CEO than Krzanich) "invented Ultrabooks" when no one at Intel did anything of the sort. Whether Steve Jobs invented the concept or got the idea from seeing mini-notebooks in Japan is irrelevant to my point.
I don't think you understand non-GAAP at all. It's only relevant if you know the minutia.
Now, why's that relevant? Well everyone is pointing at that 1.1B line item "amortization of intangible assets". I hate to break it to you, but that is unlikely to be a one time thing. It is going to continue to inflate their non-GAAP earnings for the next 15 years.
Apparently the Xilinx deal was mostly to acquire IP. That line means they are depreciating the value of the IP, amortizing it (depreciation is for physical assets - but this is the same thing). They are valuing the IP they acquired around $60B. The normal amortization time frame is 15 years. 60B/15 = 4B / year. 1B per quarter.
So this isn't necessarily bad for AMD or its fans. From what I can tell though, Xilinx isn't adding to their bottom line, their operating expenses and R&D went up significantly. Since AMD acquired Xilinx via an all-stock transaction, for AMD shareholders, it means the value of their stock just got whacked. And this line item, it's not going away, which means funny non-GAAP numbers for a long time.
So maybe more on topic to this thread, while Gelsinger is running around building new fabs (physical assets that will depreciate once built), Su is running around buying up more IP / design studios.
Which brings me back to my original point. Non-GAAP is almost always deceptive. Next quarter should be a lot more telling for both AMD and Intel.
View attachment 65279
View attachment 65280