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Intel warns investors of a grim year ahead

Execs at Intel's Q4 earnings call forecasted weak revenues thanks to weak demand for data centre and self-driving vehicle chips.

Intel's stock fell by 12% following the results, which forecast revenue in the region of USD 12.2 billion to USD 13.2 billion this quarter – short of Wall Street expectations.

The US company's data centre unit had a poor quarter, as did its automotive divison. However, analysts seem more concerned about its relative lack of presence in the white-hot market for AI chips, which is dominated by Nvidia and AMD. This is not for debate, although Intel does believe it can benefit from the AI boom in the longer term, thanks to its foundry operations.

"The rapid adoption of AI by all industries is proving to be a significant tailwind for (the group's foundry business) as high-performance compute, an area where we have considerable wafer and packaging know-how and [intellectual property], is now one of the largest and fastest-growing segments of the semiconductor market," said Intel CEO Pat Gelsinger.

Some parts of Intel's business did have a good quarter. Its PC chip business had sales of USD 8.84 billion against an estimate of about USD 8.42 billion. Intel said this was due to the market emerging from a glut of inventory. It expects total PC shipments to rise to about 300 million units this year. The total for 2023 was about 270 million.

Gelsinger also highlighted Intel's plan to push into manufacturing chips for others via a network of plants around the world. It says it has around USD 10 billion worth of orders booked already, though it has yet to name any customers. 


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February 28 2024 8:54 am V22.3.45-1
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