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Sunday, July 3, 2022
Home Technology The chip shortage did not stop Intel from having its 'best year...

The chip shortage did not stop Intel from having its ‘best year ever’


Intel still feels the burning of the chip shortage. It’s hard to take full advantage of the huge pandemic – fueled demand for new computers, because you can not make a laptop with Intel chips alone. And yet it did not stop Intel from having its best financial year ever – in today’s K4 2021 earnings, it reports its highest quarterly and highest annual revenue ever, $ 19.5 billion and $ 74.7 billion, respectively – and also four other revenue records. Profits were not nearly as rosy: net income fell 21 percent in the quarter, up 5 percent year-on-year to $ 4.6 billion and $ 19.9 billion, respectively.

CEO Pat Gelsinger warned about other suppliers’ chips limiting the company’s growth during Intel’s earnings for the third quarter of 2021 in October when the company announced that its Client Computing Group’s revenue had actually shrunk by 2 percent. Today, Intel’s earnings in the fourth quarter show that things did not improve there: CCG fell 7 percent year-on-year, again due to laptops. Intel’s presentation shows laptop revenue is 16 percent lower year-on-year because it can not send nearly as much of it as it wants, even though it probably makes more money from each laptop: the average selling price of those laptop components has increased by 14 percent rose.

But desktops are up, and the company’s other divisions more than made up for the dive (revenue-wise anyway), with Intel’s data center group rising 20 percent year-over-year to $ 7.3 billion. Smaller businesses like Intel’s Internet of Things Group (IOTG) and Mobileye (its self-driving automotive technology company) also saw more demand, 36 per cent and 7 per cent in Q4 2021 compared to Q4 2020. They have grown 33 per cent and 43 per cent respectively this year.

In October, Gelsinger suggested that the chip shortage would only end in at least 2023, which sucks a bit for Intel when you consider that the computer is currently experiencing a bit of a renaissance. 2020 was the computer industry’s first major growth in a decade, and earlier this month Gartner and IDC reported it sales have grown additional 10-15 percent in 2021, with more than 340 million computers shipped, and enough demand that IDC analysts say it could have been even bigger if not for the shortfall.

But Intel does not automatically benefit from all that growth, and not just because of other vendors. It also has serious competition these days. The Edge‘s list of the best laptops includes numerous machines that do not contain Intel chips at all, but rather Apple and AMD. This is not something we have been able to say many times over the past decade! AMD pushes even further on laptop chips this year, and Qualcomm is once again throwing its hat back into the ring. This is a difficult time for Intel to catch up with processor technology, even if our first review of Alder Lake seems like it might help.

Intel does have some interesting initiatives in the works to his fate turns, including tens of billions of dollars in investment in more chip manufacturing facilities (such as its new $ 20 billion location in Ohio), which serves as a made-in-US political play for subsidies) and its own discrete graphics processors called Intel Arc. The Intel Arc Alchemist looks like a dark horse candidate to shake up the GPU market in both computers and laptops later this year.

Intel will have a earnings call at 17:00 ET; we’ll let you know if it says anything important about the chip shortage, or what’s next for the company.



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