Intel reports declining sales due to decreased demand for chips – IT Pro – News

Intel’s turnover was lower than expected in the past quarter, partly due to falling demand for PCs. Sales of Intel’s consumer division fell 25 percent. The company is slashing earnings and revenue expectations for the remainder of 2022.

Last quarter Intel’s sales fell to $15.3 billion, 22 percent less than the same period in 2021. The chipmaker indicates that this is due to disappointing results from its Client Computing and Datacenter and AI divisions, which focus on consumer and hpc products respectively. Those industries were hit last quarter by “unfavorable market conditions,” the company wrote. The Network and Edge division and MobileEye, an Intel subsidiary that works on self-driving cars, achieved record sales, according to Intel.

Net profit also fell last quarter. Starting from results calculated according to the gaapprinciples, the company lost $450 million last quarter. The non-GAAP results come in at a profit of $1.2 billion. That loss in GAAP results is partly due to inventory reservations for future product releases, which are under this US generally accepted accounting principles count as a cost. Intel also lost $155 million in scaling up its Foundry Services division to produce chips for other companies.

Also contributing is the $559 million write-off Intel had to write off for its Optane division. CEO Pat Gelsinger announced at the presentation of Intel’s quarterly results that the company will discontinue those memory products. The company indicates that it will phase out its Optane activities in the near future. Tweakers published Friday a backstory about the end of Optane and why that’s no surprise.

For the coming quarter, Intel expects revenues between 15 and 16 billion dollars, where it previously forecasted 19.2 billion dollars. For the full year, the company expects revenues of $65 to $68 billion, a decrease of up to 13 percent from previous expectations. The company does expect this to be the low point, and expect margins to rise again in the coming quarters. The company is also looking at ways to reduce spending in the short term. The plans to build new chip factories in the US and Europe do not fall under this, according to the company.