Intel Corp.'s third-quarter revenue fell 15% to $15.3 billion, in full compliance with its management's projections.
By the middle of the decade, Intel hopes to cut annual expenses by $8-10 billion, with savings reaching $3 billion as early as next year.According to the head of the company, staff cuts will not be a significant factor in savings, although they will start already in the current quarter.Image source: Intel Net income at Intel in the past quarter fell by 59% from $5.9 to $2.4 billion using Non-GAAP method and operating profit margin fell from 31.8 to 10.8 %.
Profit margin fell from 58.3% to 45.9% year over year.
At the same time, the company managed to increase spending on research and development by 12% to $5.4 billion.
Intel was forced to end the quarter with operating losses, but due to the tax refunds it showed a net profit.
The period ended with an operating loss of $175 million, but a net profit of $1.02 billion.In the client computing area, which is most dependent on PC market conditions, Intel's revenues fell 17% year over year to $8.1 billion, but grew sequentially by 6% due to an increase in average selling price.
Intel expects PC sales to dip 15 to 19 percent this year, primarily in the consumer and education sectors, as well as inventory adjustments in the OEM segment, but year-over-year sales should remain above pre-pandemic levels for the foreseeable future.
At the end of next year, PC sales should either remain at current levels or decline slightly.
According to the Intel representatives, from 270 to 295 million computers will be sold next year.
The head of the corporation even said that Intel was able to significantly strengthen its position in the PC segment in the third quarter.Image source: IntelIn the server segment last quarter, revenue at Intel dropped by an impressive 27% to $4.2 billion, but in the reporting documents the company proudly announced that it had started production of those models of processors Sapphire Rapids family, which were aimed at mass consumption, and also expects to slightly increase its market share in this segment by the end of the year.
In the past quarter, Intel's server revenue was undermined by weak demand in the Chinese corporate sector.Image source: IntelThe immediate issue of the upcoming staff reductions at the quarterly event Intel management spoke reluctantly, only noting its inevitability.
Intel's freelancers and contractors will be the first to suffer, they will feel Intel's desire to save money as early as this quarter.
Marketing and advertising costs will be cut.
Quantitative figures for staff reductions are not specified, but CFO Davis Zinsner let it slip that they will be significant.
CEO Patrick Gelsinger added that production costs would be prioritized over payroll in the search for cost savings.
By early October, the company had 131,500 employees.According to Intel's management, the company is on track to implement a plan to master five new process technologies in four years.
There were no delays in learning Intel 4 and Intel 3 technologies, the first prototypes of chips made with the Intel 20A and Intel 18A technologies were already running in the company's labs, and this also applies to products for a large third-party customer - at least the digital design of the respective product is ready and the first working samples exist.
In the customer segment, the company is going to introduce Meteor Lake processors (Intel 4) next year, at the same time Emerald Rapids servers will appear.
On schedule, the company is preparing to launch server processors in 2024.
The Meteor Lake series stepping design should be completed this quarter, and Intel's server segment managed to get the first Intel 3 Granite Rapids processor components last quarter, systems based on their samples are already working in Intel labs.
For the first time, the company will use ultra-hard ultraviolet (EUV) lithography as part of its Intel 4 and Intel 3 processors.
This will endow the respective products with breakthrough performance in terms of performance per watt of power consumption and density, according to Intel.Image source: IntelSome of Intel's business areas showed positive revenue growth in the third quarter.
Among them were networking and edge computing solutions, which grew revenue 14% to $2.3 billion and kept operating income at $75 million, despite an 85% decline from the same period last year.
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