CollinsIntel has recently struggled to push its more advanced chip architectures out the door, but that could soon change. On Intel’s Q2 earnings call today, CEO Pat Gelsinger stated that “7nm is moving well,” and that the firm would hold a webcast on Monday, July 26th to discuss how it is “accelerating our annual cadence of innovation with new improvements in semiconductor process and packaging.”
The news coincides with Intel’s Q2 earnings, which saw the semiconductor manufacturer outperform estimates by bringing in $18.2 billion in revenue, up 2% year over year. Intel, for one, is quite upbeat about the future. It increased its revenue forecast for 2021 by $1 billion to $73.5 billion, and now expects to gain revenue year over year compared to 2020.
Despite many delays and failures in production of both its 10nm and 7nm chips, Intel’s earnings have been going upwards for several quarters. Due to the COVID-19 epidemic, which saw millions acquire new laptops and computers to aid in distant work and education, as well as an increased reliance on cloud services, demand for both personal computers and data-center chips soared in 2020.
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Despite the global semiconductor shortage, Intel’s client computing segment recorded $10.1 billion in revenue (up 6% year over year and a Q2 record for the company). During the conference call, Gelsinger stated that he “expect[s] the shortages to bottom out in the second half [of the year], but it will take another one to two years for the industry to fully catch up with demand.”
The increase in revenue for the client computing group also helped Intel compensate for reduced revenue from its data center division, which was down 9% year over year to $6.5 billion. However, there are indicators that the PC segment’s strong rise is slowing: both IDC and Gartner reported that PC sales growth slowed significantly in Q2, possibly indicating that the sales boost may fade in the following months.
Intel has had a rough year in recent years. Last summer, the business was forced to disclose that its impending 7nm design for its next generation of processors will be badly delayed. In an attempt to right the ship, the company’s hardware leader, Dr. Venkata (Murthy) Renduchintala, resigned, and CEO Bob Swan was replaced with Pat Gelsinger (a former chief technology officer and hardware engineer at the company).
Gelsinger has spent no time in attempting to make adjustments to bring Intel back on track, announcing in March a new “IDM 2.0” program that hopes to see Intel reclaim its position as a chip manufacturing leader. Starting in 2023, Intel will outsource production of “items at the core of Intel’s computing portfolio” to competitors such as TSMC and Samsung as part of that strategy.
Intel is also preparing to launch Intel Foundry Services, a new division of the corporation that will handle manufacturing projects for third parties, including a $20 billion investment in expanding its Arizona manufacturing facilities.
Intel Foundry Services could be a huge gain for the corporation down the road, given the tremendous demand for more chip-making companies in light of the worldwide semiconductor scarcity. Intel revealed today that over 100 potential customers have expressed interest in the service, and promised additional information on the new project on Monday, but it will be some time before the business picks off.
Collins