Intel Reports Fourth-Quarter and Full-Year 2022 Financial Results, Largest Loss in Years

[TheLostSwede]

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 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.

Business Outlook
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.



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[mama]

More significant cost cutting to come then. But on the bright side, Meteor Lake later this year (hopefully).

 

[Wirko]

I find this detail particularly perplexing:

Intel, can you sell me an i5 for $(200)?

 

[Daven]

That outlook on next quarter is super bad. Margins at 34%! After hours stock price has dropped almost 10% so far! These are not the numbers of a market leader.

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.

 

[pressing on]

That outlook on next quarter is super bad. Margins at 34%! After hours stock price has dropped almost 10% so far! These are not the numbers of a market leader.

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.

There's clearly been a meltdown in PC/PC component sales compared to a year ago. Maybe the bust after the boom or is it a readjustment to more normal levels of demand.

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.

 

[Denver]

A company with problems to fix should not pay dividends..

 

[windwhirl]

I predict Intel’s value will drop below ARM and Nvidia will try to buy them out.

Please imagine I'm laughing so hard that I'm in tears and slamming my fist on the table while laughing at that idea.

 

[Chaitanya]

More significant cost cutting to come then. But on the bright side, Meteor Lake later this year (hopefully).

Those cost cutting would be in form of layoffs and not in form of salary cuts for upper management.

 

[SOAREVERSOR]

Those cost cutting would be in form of layoffs and not in form of salary cuts for upper management.

Obviously!

 

[wheresmycar]

CCG down 36% but still producing in the billions.
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!

 

[trsttte]

I predict Intel’s value will drop below ARM and Nvidia will try to buy them out.

As much as that has no basis in reality it's a really funny idea.

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.

For sure the discrete GPU project will be cancelled now.

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)?

AMD's GPU Market Share Drops to 22 Year+ Low in Q3 22: NVIDIA Controls Nears the Entire Graphics Card Market | Hardware Times

AMD’s graphics card market has been in a slump of late. In fact, the Radeon share dipped to an all-time low of 10% last quarter, a reminiscence of the 2017-18 post-mining hangover. NVIDIA, on the other hand, gained ample market share through the last few quarters despite falling prices (and...

www.hardwaretimes.com

 

[prtskg]

Intel feels highly mismanaged. From consumer point of view Nvidia may be terrible but financially they rule the roost with greater than 60% margin. 34% gross margin! What the hell is Intel doing? Consumers may be happy with cheap products but is such gross margin sustainable? AMD had such gross margin during bulldozer days and rightly so. But Intel doing so bad feels they are giving their products for cheaper than market price. They might lag behind in R&D at this rate. No wonder Pat wanted government funding so badly.

 

[claes]

Because GPUs are CPU bound and there haven’t been CPU advancements to keep up with GPU advancements. Even (really especially) in the enterprise space everything is moving towards MCM or purpose built processors, where nvidia excels and amd/Intel are still figuring things out.

 

[AnarchoPrimitiv]

As much as that has no basis in reality it's a really funny idea.

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)?

AMD's GPU Market Share Drops to 22 Year+ Low in Q3 22: NVIDIA Controls Nears the Entire Graphics Card Market | Hardware Times

AMD’s graphics card market has been in a slump of late. In fact, the Radeon share dipped to an all-time low of 10% last quarter, a reminiscence of the 2017-18 post-mining hangover. NVIDIA, on the other hand, gained ample market share through the last few quarters despite falling prices (and...

www.hardwaretimes.com

I think you don't realize how profitable the Custom SoC market is an how Graphics IPs play a large part in it....AMD's Graphics IPs make it into many more products than just consumer GPUs.

Intel feels highly mismanaged. From consumer point of view Nvidia may be terrible but financially they rule the roost with greater than 60% margin. 34% gross margin! What the hell is Intel doing? Consumers may be happy with cheap products but is such gross margin sustainable? AMD had such gross margin during bulldozer days and rightly so. But Intel doing so bad feels they are giving their products for cheaper than market price. They might lag behind in R&D at this rate. No wonder Pat wanted government funding so badly.

"Lag behind in R&D..."....compared to whom? Intel's R&D budget is over $15 billion (Nvidia's is $5.27 Billion and AMD's $2 billion)....they're certainly not lagging behind with respect to financial resources, Intel's R&D budget make's AMD's look like pocket change. As for the "government funding" (I call it a huge corporate hand out with absolutely zero tangible benefits for the average working class person), Intel wanted it because they knew they could extort the money from the tax payer, and that once they got it they'd use it for huge bonuses and stock buy backs. There REALLY should have been some strict stipulations on that tax payer money (i.e. no mass layoffs for a stated period of time, no stock buy backs for a stated period of time, no bonuses for management, etc, etc, etc....personally, I think the American government shouldn't have given Intel any money and instead told Intel that if they DON'T build that fab in America, every subsidy would be cut, every tax loop hole, and the IRS would have a microscope up Intel's a** for the next ten years making sure they didn't owe a single penny....but that's just me.

 

[Redwoodz]

I think you don't realize how profitable the Custom SoC market is an how Graphics IPs play a large part in it....AMD's Graphics IPs make it into many more products than just consumer GPUs.


"Lag behind in R&D..."....compared to whom? Intel's R&D budget is over $15 billion (Nvidia's is $5.27 Billion and AMD's $2 billion)....they're certainly not lagging behind with respect to financial resources, Intel's R&D budget make's AMD's look like pocket change. As for the "government funding" (I call it a huge corporate hand out with absolutely zero tangible benefits for the average working class person), Intel wanted it because they knew they could extort the money from the tax payer, and that once they got it they'd use it for huge bonuses and stock buy backs. There REALLY should have been some strict stipulations on that tax payer money (i.e. no mass layoffs for a stated period of time, no stock buy backs for a stated period of time, no bonuses for management, etc, etc, etc....personally, I think the American government shouldn't have given Intel any money and instead told Intel that if they DON'T build that fab in America, every subsidy would be cut, every tax loop hole, and the IRS would have a microscope up Intel's a** for the next ten years making sure they didn't owe a single penny....but that's just me.

How dare you! You can't hold Intel responsible for it's actions, we want the next`Core to be faster than AMD! No matter what!

 

[Bwaze]

There's clearly been a meltdown in PC/PC component sales compared to a year ago. Maybe the bust after the boom or is it a readjustment to more normal levels of demand.

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.

Yeah, I predict bad news for every tech giant. Noone right now has products that are flying off the shelves - AMD has Ryzen 7000 that is selling way worse than it's old line - when is the last time that has happened? And Nvidia is pricing it's RTX 40x0 as if the don't really want to sell them...

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...

 

[TheDeeGee]

There's clearly been a meltdown in PC/PC component sales compared to a year ago. Maybe the bust after the boom or is it a readjustment to more normal levels of demand.

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.

CPUs and GPUs last longer these days, the days of upgrading every generation are long gone.

 

[TheLostSwede]

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)?

AMD's GPU Market Share Drops to 22 Year+ Low in Q3 22: NVIDIA Controls Nears the Entire Graphics Card Market | Hardware Times

AMD’s graphics card market has been in a slump of late. In fact, the Radeon share dipped to an all-time low of 10% last quarter, a reminiscence of the 2017-18 post-mining hangover. NVIDIA, on the other hand, gained ample market share through the last few quarters despite falling prices (and...

www.hardwaretimes.com

I suggest you read this thread on Twitter before takign the JPR figures as fact.
It seems like they're not doing an apples to apples comparison with the figures, as they're heavily skewed in favour of Nvidia.

AMD's number is desktop AIB cards. Nvidia's is "unit shipments" which includes server + consumer + professional.

https://twitter.com/i/web/status/1618154926156447744

 

[Daven]

As much as that has no basis in reality it's a really funny idea.

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)?

AMD's GPU Market Share Drops to 22 Year+ Low in Q3 22: NVIDIA Controls Nears the Entire Graphics Card Market | Hardware Times

AMD’s graphics card market has been in a slump of late. In fact, the Radeon share dipped to an all-time low of 10% last quarter, a reminiscence of the 2017-18 post-mining hangover. NVIDIA, on the other hand, gained ample market share through the last few quarters despite falling prices (and...

www.hardwaretimes.com

AMDs GPU business has always been many 10s of percentage points of its revenue even at its lowest point. Intels discrete graphics business doesnt even crack 1% of its revenue. That’s why.

More significant cost cutting to come then. But on the bright side, Meteor Lake later this year (hopefully).

Meteor Lake doesn’t come out until late 2024, maybe early 2025. Its Raptor Lake refresh at the end of this year.

 

[pressing on]

Meteor Lake doesn’t come out until late 2024, maybe early 2025. Its Raptor Lake refresh at the end of this year.

As part of the financial presentation yesterday Intel said that Meteor Lake will be second half of this year with Lunar Lake in 2024.

 

[Assimilator]

https://twitter.com/i/web/status/1618922092455694336

A company with problems to fix should not pay dividends..

They do if they want to keep shareholders happy. Such is the insanity of capitalism: you have to spend money to get more people to give you money so that you have enough money to fix the fundamental monetary problems in your business.

Please imagine I'm laughing so hard that I'm in tears and slamming my fist on the table while laughing at that idea.

If Intel and NVIDIA continue on their current trajectories WRT gross margins, it may indeed become financially viable in a few years. Of course, competition laws would prevent such a purchase/merger, in the exact same way they blocked NVIDIA's buyout of Arm.

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.

 

[Tek-Check]

The world is in crisis and heading into recession. Challenging environment to operate in. People are mote savvy and careful with money and minimise spending on non-essential parts of tech, such as frequent and non-critical upgrades.

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.

 

[TheinsanegamerN]

They do if they want to keep shareholders happy. Such is the insanity of capitalism: you have to spend money to get more people to give you money so that you have enough money to fix the fundamental monetary problems in your business.

Surprisingly, you need to spend money to make money, especially when you are trying to convince people to buy part of your company for a perceived benefit.

If Intel and NVIDIA continue on their current trajectories WRT gross margins, it may indeed become financially viable in a few years. Of course, competition laws would prevent such a purchase/merger, in the exact same way they blocked NVIDIA's buyout of Arm.

No. No it wouldnt. This is like those people that swear bitcoin is going to a million $ because look at muh trajectories, with no understanding of the sheer volume of cash needed to push that high.

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.

ARM is tiny compared to nvidia and nvidia couldnt manage it. Even without regulators, the debt from trying to buy ?ARM would cause major issues with nvidia moving forward. Buying a monolith like intel? Remember how badly ATi went for AMD? Multiply that by about 10.

 

[darksf]

Well I don't expect anyone in the sillicon business to post any positive numbers this year. They got carried away during the global pandemic when everyone went home and started upgrading their equipment for remote working or just entertaining and plus the mining craze. Well that is over in first place , second all kind of components got really expensive because of new production costs or just market doesn't matter anymore but is beyound what the average buyer would spend , third crypto mining is dead no one needs those expensive GPUs anymore to make money from them and fourth we are already in global economic crash and if you don't see it you will be by the summer. Many factors here but the major ones are giving all this financial injections during the pandemic and the war in Ukraine that shook energy markets last year and most probably will continue doing so and this year.

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.

 

[trsttte]

I suggest you read this thread on Twitter before takign the JPR figures as fact.
It seems like they're not doing an apples to apples comparison with the figures, as they're heavily skewed in favour of Nvidia.

Yeah, I was very sus about those numbers seing as Radeon is finally being a very real competitive but it was what google gave me. My point was just that why would intel quit after a single generation when they even were able to bring some very interesting things to their product line!?

AMDs GPU business has always been many 10s of percentage points of its revenue even at its lowest point. Intels discrete graphics business doesnt even crack 1% of its revenue. That’s why.

As said above, it's just the first generation product and they still need to incorporate competive solutions for the integrated soc's even if they were to drop the discrete part. It would make little sense to throw in the towell right away when they barely scratched the surface on what they can do.

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)