Thursday, January 26th 2023
Intel Reports Fourth-Quarter and Full-Year 2022 Financial Results, Largest Loss in Years
Intel Corporation today reported fourth-quarter and full-year 2022 financial results. The company also announced that its board of directors has declared a quarterly dividend of $0.365 per share on the company's common stock, which will be payable on March 1, 2023, to shareholders of record as of February 7, 2023.
"Despite the economic and market headwinds, we continued to make good progress on our strategic transformation in Q4, including advancing our product roadmap and improving our operational structure and processes to drive efficiencies while delivering at the low-end of our guided range," said Pat Gelsinger, Intel CEO. "In 2023, we will continue to navigate the short-term challenges while striving to meet our long-term commitments, including delivering leadership products anchored on open and secure platforms, powered by at-scale manufacturing and supercharged by our incredible team."
"In the fourth quarter, we took steps to right-size the organization and rationalize our investments, prioritizing the areas where we can deliver the highest value for the long term," said David Zinsner, Intel CFO. "These actions underpin our cost-reduction targets of $3 billion in 2023, and set the stage to achieve $8 billion to $10 billion by the end of 2025."
Business Unit Summary
Intel previously announced several organizational changes to accelerate its execution and innovation by allowing it to capture growth in both large traditional markets and high-growth emerging markets. This includes the reorganization of Intel's business units to capture this growth and provide increased transparency, focus and accountability. As a result, the company modified its segment reporting in the first quarter of 2022 to align to the previously announced business reorganization. All prior-period segment data has been retrospectively adjusted to reflect the way the company internally manages and monitors operating segment performance starting in fiscal year 2022.
Business Highlights
Intel's guidance for the first quarter of 2023 includes both GAAP and non-GAAP estimates. Reconciliations between GAAP and non-GAAP financial measures are included below.
Source:
Intel
"Despite the economic and market headwinds, we continued to make good progress on our strategic transformation in Q4, including advancing our product roadmap and improving our operational structure and processes to drive efficiencies while delivering at the low-end of our guided range," said Pat Gelsinger, Intel CEO. "In 2023, we will continue to navigate the short-term challenges while striving to meet our long-term commitments, including delivering leadership products anchored on open and secure platforms, powered by at-scale manufacturing and supercharged by our incredible team."
Business Unit Summary
Intel previously announced several organizational changes to accelerate its execution and innovation by allowing it to capture growth in both large traditional markets and high-growth emerging markets. This includes the reorganization of Intel's business units to capture this growth and provide increased transparency, focus and accountability. As a result, the company modified its segment reporting in the first quarter of 2022 to align to the previously announced business reorganization. All prior-period segment data has been retrospectively adjusted to reflect the way the company internally manages and monitors operating segment performance starting in fiscal year 2022.
- Intel continues to make progress with its goal of achieving five nodes in four years and is on track to regain transistor performance and power performance leadership by 2025. Intel 7 is now in high-volume manufacturing for both client and server. Intel 4 is manufacturing-ready, with the Meteor Lake ramp expected in the second half of 2023. Intel 3 continues to progress and is on track. On Intel 20A and Intel 18A, Intel's first internal test chips, and those of a major potential foundry customer, have taped out with products undergoing fabrication.
- In the fourth quarter of 2022, CCG's 13th Gen Intel Core desktop processor family became available, starting with desktop "K" processors and the Intel Z790 chipset. Additionally, in December 2022, in partnership with ASUS, Intel officially set a new world record for overclocking, pushing the 13th Gen Intel Core i9-13900K past the 9 gigahertz barrier for the first time ever.
- In January 2023, DCAI launched its 4th Gen Intel Xeon Scalable processors (formerly code-named Sapphire Rapids) with the support of customers and partners such as Dell Technologies, Google Cloud, Hewlett Packard Enterprise, Lenovo, Microsoft Azure, NVIDIA and many others, and is ramping production to meet a strong backlog of demand.
- NEX achieved a second consecutive year of double-digit revenue growth, hitting key product milestones with Intel IPU E2000 (Mount Evans), Raptor Lake P&S, Alder Lake N and Sapphire Rapids.
- AXG delivered record revenue for both the fourth quarter and full year. In January 2023, AXG launched the Intel Xeon CPU Max Series (formerly code-named Sapphire Rapids HBM) and the Intel Data Center GPU Max Series (formerly code-named Ponte Vecchio). Intel also announced that with AXG's flagship products now in production, the company is evolving AXG's structure to accelerate and scale its impact and drive go-to-market strategies with a unified voice to customers. Accordingly, the consumer graphics teams will join CCG, and the accelerated computing teams will join DCAI.
- IFS achieved record revenue for both the fourth quarter and full year, with active design engagements with seven of the 10 largest foundry customers. It also added a leading cloud, edge and data center solutions provider as a customer to Intel 3.
- Intel completed the IPO of Mobileye, which achieved record revenue for both the fourth quarter and full year of 2022. Mobileye continued to execute well in its core advanced driver-assistance systems (ADAS) business, as it launched systems into 233 distinct vehicle models in 2022.
Intel's guidance for the first quarter of 2023 includes both GAAP and non-GAAP estimates. Reconciliations between GAAP and non-GAAP financial measures are included below.
45 Comments on Intel Reports Fourth-Quarter and Full-Year 2022 Financial Results, Largest Loss in Years
Intel, can you sell me an i5 for $(200)?
I predict Intel’s value will drop below ARM and Nvidia will try to buy them out.
For sure the discrete GPU project will be cancelled now.
AMD will be reporting its Q4 2022 numbers on January 31, and NVIDIA sometime in February. Let's see what they look like.
The discrete GPU project has disappeared as a separate business unit. Along with integrated graphics it is now part of the AXG (Accelerated Computing Systems and Graphics) Group.
I wander how thing will shape up going forward... tough times for these giant businesses. As long as it means "more reasonable" priced products on the horizon i'm all for it!
In practice market cap is not the same as company valuation. Intel has their own fabs, is in a ton of different markets, is a strategic US asset and has a relatively low debt. They'll be fine.Why? If AMD didn't cancel the gpu division while hitting record low market share or debacles like the Radeon VII, why would Intel when it's just starting out and already giving interesting outputs (far from great but interesting)?
www.hardwaretimes.com/amds-gpu-market-share-drops-to-22-year-low-in-q3-22-nvidia-controls-nears-the-entire-graphics-card-market/
I think it's the perfect combination of several factors.
- "Bust after the boom" - there was unprecedented increase of PC sales during lockdowns: work from home, school from home, lots of free time to be spent at home - all that's gone now, and many people have now bought systems that will suffice for the next 4+ years...
- Recession and high inflation. And jobs insecurity. Self explanatory.
- High price jumps of PC equipment even above high inflation. Usually explained as effect of troubles in global shipping, after effects of covid lockdowns, various trade and tech wars... But I think it's also a bit other sectors looking at high cryptomining profits of Nvidia and wanting some of that pie for themselves - without actual demand increase...
It seems like they're not doing an apples to apples comparison with the figures, as they're heavily skewed in favour of Nvidia.
We should also not forget that NVIDIA used to make chipsets for Intel CPUs, back in the days when north and south bridges were still a thing, and there was eventually a settlement between the two companies that saw NVIDIA explicitly denied the rights to an x86 license. So they'd certainly jump at the chance, no matter how remote it is, to get their hands on that IP - even if they're unlikely to use it (due to their massive investment into Arm), it would something they could sell to someone else for a massive profit.
Older gear can serve another year or two. Also, prices of new desktop systems and laptops are often absurdly high, so even if someone wants to buy, there is another barrier.
As for Intel, they did not innovate fast enough in server sector, plus losses in graphics division plus giant loss in client division. People buy less from everyone, including from Intel, and server share is slowly shifting towards AMD and ARM solutions.
Intel may end up dropping to 55% of server market share at the end of the year if AMD and ARM adoption further accelerate.
So whoever is not ready will sink , and you will see even more layoffs in the global tech giants and not only tech. During the pandemic people got carried away spending absurd amounts of money for some things like gadgets and home properties inflating the prices to levels that are not realistic.All this will drive the prices of everything up (initially except cars but later and their prices also because of more expensive manufacturing) , and normally sallaries won't follow that trend with same speed so people will start spending less and less.
And while the discrete graphics business is still a very small part of Intel's revenue, that's also a testament to the ammount of different things they do, their product portfolio is quite large, let's not try to create another "Google" that drops anything that doesn't make huge profits right away (to the point they're kind screwed if they're forced to breakup the ad business now)