In the last quarter, sales in the two most important pillars of the group fell by more than 30 percent and operating profit fell by more than 80 percent. Intel boss Pat Gelsinger referred to the weak economy and did not see any improvement in prospect for the current quarter. The stock fell 10.54 percent to $26.92 in trading on the NASDAQ.
Intel’s quarterly figures were below analysts’ estimates and their forecast for the current quarter also missed expectations. The group expects revenues of 10.5 to 11.5 billion dollars (9.6 to 10.6 billion euros), while analysts had expected almost 14 billion.
In the PC chip business, Intel’s sales fell by almost 36 percent to $6.6 billion. According to calculations by the analysis company Gartner, sales of personal computers collapsed by a good 28 percent in the past quarter. That was the sharpest decline since Gartner began tracking the market in the mid-1990s. In the first few years of the corona pandemic, sales of computers – especially notebooks – had grown explosively. In the meantime, demand has fallen sharply.
Operating income from Intel’s PC division fell to just $699 million – from around $3.8 billion a year earlier. The group cites investments in future chips and production processes as one of the reasons.
In data center technology, revenues fell by around a third to $4.3 million. Intel is fighting against attacking rivals like AMD in the lucrative market. In this division, too, there was a slump in earnings with 371 million dollars instead of 2.3 billion dollars a year ago.
Consolidated revenue fell 32 percent year-on-year to $14 billion last quarter. The bottom line is that there was a loss of $664 million after a profit of a good $4.6 billion a year earlier, as Intel announced after the US stock market closed.
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Minister Schulze does not see the start of Intel production in 2027/28 at risk
Saxony-Anhalt’s Economics Minister Sven Schulze (CDU) continues to be optimistic about the planned settlement of the US chip manufacturer Intel in Magdeburg. “I see a start of production in 2027, at the latest in 2028 not at risk,” said Schulze in an interview with the “Magdeburger Volksstimme” (Friday). “For us – that is, for the state and the municipalities involved – the highest speed still applies. We have to prepare everything so that we are ready when Intel gives the starting signal.” The development of the high-tech park will cost the state an estimated 500 million euros over the next ten years.
In March 2022, Intel announced that the latest generation of chips would be produced in the state capital of Saxony-Anhalt from 2027. In a first expansion stage, two semiconductor factories are to be built, which could create several thousand jobs.
Intel recently emphasized that they stand by the investment plans and named 2024 as a possible year for the start of construction. In addition, the company focused on the competitiveness of the Magdeburg location. It’s about the energy and construction costs as well as personnel. Intel board member Keyvan Esfarjani said in an interview with “Zeit online”: “Germany has its own experts who know how to get energy prices back below 6 to 8 cents. I can only say: A chip factory with electricity prices of 50 cents (per kilowatt hour) is definitely not competitive.”
Economics Minister Schulze described the demand as understandable. “Intel needs planning certainty. And in many regions of the world, energy is significantly cheaper.” The questions would be discussed in a task force in Berlin. “We are on the right track when it comes to energy costs. I think a price of around ten cents is feasible,” said the minister.
He emphasized that he was grateful that the federal government wanted to support the investment with 6.8 billion euros. “We’re not talking about an even higher volume at the moment – we’re talking more about how we can reduce future costs.” Intel is very interested in renewable energies, which is why the construction of large wind turbines in Saxony-Anhalt is an issue. “Another topic is an energy consortium with which Intel can agree long-term direct supply contracts on good terms.” With regard to the construction costs, Schulze said that nobody knew where they were headed.
Economics Minister Schulze also emphasized the planned increased recruitment of skilled workers. Experts from all over the world and their families should be offered the best possible starting conditions. “Saxony-Anhalt must develop into a top state in terms of international acquisition”, this also applies to other company settlements. “Saxony-Anhalt needs tens of thousands of workers in all qualification levels.”
SANTA CLARA / MAGDEBURG (dpa-AFX)
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