Intel Reports Q2-2024 Financial Results; Announces $10 Billion Cost Reduction Plan, Shares Fall 20%+

[Jomale]

Realtime Intel Stock 21,35 Euro 12.45 O'clock/Fri

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Intel to lay off more than 15% of workforce — 15,000 or more employees — encountered Meteor Lake yield issues, suspends dividend

From bad to worse.

www.tomshardware.com

 

[64K]

Should be a nervous day for Intel investors when trading begins this morning. This is the biggest reason that I don't invest in individual stocks. I like being able to sleep good at night and not having stomach ulcers.

 

[Darmok N Jalad]

Anything about execs leading by example and taking a 90% cut

Typically, executives get a fairly nominal base salary, with stock as the primary bonus mechanism. Basically, if the company performs, the execs get "raises" in stock options that they can keep or sell. If they sell, that gets reported. For example:

Apple CEO Tim Cook Sells Shares Valued at About $88 Million

Apple CEO Tim Cook sold 511,000 shares of company stock worth about $88 million as the stock price has tumbled from its all-time high.

www.investopedia.com

CEOs aren't kings; they answer to the Board of Directors and shareholders, so when you hear stories about "CEOs giving themselves a raise," this is false, the Board has to approve that, and Board members are usually looking out for the owners of the company first. The CEO can always ask, but it's not up to him. Basically, Pat might still bring home a good salary, but if Intel's stocks tank, he's lost a lot of net worth. Honestly, I can understand why executives make big money--considering the number of livelihoods they are responsible for, you want to offer a really good salary to hopefully get a really good leader. Otherwise there could be the temptation to do something like Enron's execs did, screwing over employees, stockholders and customers.

All that said, even a big salary isn't a guarantee of good performance and ethical behavior. However, it can more often be corporate silos and in-fighting that can cause these big failures. Like at MS, for example, where the Windows and Office teams seem to never be on the same page. A good CEO knows that this ultimately falls on him, and he can only spin this stuff for so long before the truth comes out. Intel has been treading water for too long, and it looks like investors are finally taking notice. I actually wonder how much more runway Pat has with as many issues as we're seeing--Raptor Lake problems, node production issues, big losses in the GPU division. Much of that he inherited, but none of it has improved. I actually wonder if the GPU division is on the list of things to get cut. It doesn't look like it will be profitable any time soon.

 

[R0H1T]

But what if they're the cult of Musk?

 

[R0H1T]

It's not as simple as that, Intel's cross licensing x86-64 from AMD as well & without that they're stuck on 4GB ram.

 

[phanbuey]

Good job Pat, keep the good work!
Looking forward to the market opening
View attachment 357255

Oh my god these are gonna be spicy.

 

[64K]

Down around 28% so far today. For investors that bought in a few months ago at the highs have seen their investment get cut in half. Assuming they sell today. The loss is just on paper until they sell. I wonder how bad this train wreck will get before working through the defective CPU issue and the likely expensive class action lawsuit.

 

[phanbuey]

Down around 28% so far today. For investors that bought in a few months ago at the highs have seen their investment get cut in half. Assuming they sell today. The loss is just on paper until they sell. I wonder how bad this train wreck will get before working through the defective CPU issue and the likely expensive class action lawsuit.

They might hit the single digits, but in the long run IMO still a buy.

If China starts to move on Taiwan intel will be a $100 stock overnight.

 

[Darmok N Jalad]

They might hit the single digits, but in the long run IMO still a buy.

If China starts to move on Taiwan intel will be a $100 stock overnight.

They’ll turn it around I’m sure. It’s really just figuring out what the floor is, and right now they don’t have a lot of bright spots to showcase. Still, they make products that aren’t going away anytime soon, even if they are second-class products for the foreseeable future.

 

[R0H1T]

If that happens what do you think will be the fate of the 2-4(?) trillion dollars of goods that move through Indian/Pacific Ocean in that region?

Intel will be the last thing investors will have to worry about!

 

[z1n0x]

Pat's rear-view mirror appears to be malfunctioning.

 

[MaMoo]

What does DEI mean? For you to use it in such a negative light. Are you really suggesting that Intel is losing because they do not hire only White European people?

I assumed it meant the bloated admin body. I am not sure about Intel but places like Stanford and Yale have somehow a much larger admin body than academic staff. Yale has >5000 admins for 6000 students. Stanford has 18369 admins for 2323 academics. I assumed that Intel has a sizable DEI admin as well that were hired to meet specific DEI and ESG business objectives.

 

[GhostRyder]

This is a failure of leadership and a focus on the past instead of the future. Intel has been too stuck on its previous dominance that it has made them scrambling to keep up recently which is why we are seeing issues across the board. They need a leadership change just like AMD did back in the day to come back.

 

[Craptacular]

It's not as simple as that, Intel's cross licensing x86-64 from AMD as well & without that they're stuck on 4GB ram.

That is not true at all, Intel designed a 64-bit chip, it was called itanium and was a different design than x86-64. It was their attempt to get people to stop using x86 that way they would have a monopoly because they wouldn't be forced to license to AMD.

Intel did cross licensing so that they wouldn't have to reinvent the wheel to get the 64-bit extension for x86 and reduce the time AMD would have a 64-bit extension for x86 monopoly. Intel is and was more than capable of developing a 64-bit extension for x86. It was just faster to use AMD.

 

[Tom Yum]

That is not true at all, Intel designed a 64-bit chip, it was called itanium and was a different design than x86-64. It was their attempt to get people to stop using x86 that way they would have a monopoly because they wouldn't be forced to license to AMD.

Intel did cross licensing so that they wouldn't have to reinvent the wheel to get the 64-bit extension for x86 and reduce the time AMD would have a 64-bit extension for x86 monopoly. Intel is and was more than capable of developing a 64-bit extension for x86. It was just faster to use AMD.

The point is that Intel and AMD have become so interdependent on each others various x86 patents and licences that they are effectively joint owners of the modern x86 ISA. Neither AMD or Intel could threaten to withdraw their various x86 extensions without effectively losing the ability to make any modern x86 processor.

Intel went with AMD's x64 extension not because it was quicker to implement but because a critical mass of software had already been developed for 'AMD64' (which was introduced in 1999) by the time Intel introduced their x86-64 implementation (2004) once it became clear Itanium was failing against x64 Opteron. MS had also made clear that the AMD64 extension would be THE x64 Windows going forward after the current in-development version was completed (Windows Server 2008). That effectively killed any chance Intel had with Itanium in the consumer and general purpose compute market, leaving Intel with no choice but to adopt AMD64 (rebranded to Intel64, generalised to x86-64). Intel could have tried to develop an alternate x86-64 extension, but by 2003 it was clear an alternative non-compatible x64 extension would fail to get the necessary developer adoption to supplant x86-64.

 

[Squared]

Anandtech also had an article on Meteor Lake yields. Basically, yields are terrible on the part of ML that Intel actually fabs, and they are just burning through wafers to get enough supply out the door. They can't afford to have partners go elsewhere for chips (especially now that Qualcomm is in the fray), and they really are taking it in the shorts with their own nodes. At one time, Intel was the best fabricator on the planet, but it's been a long struggle that starts with their 10nm efforts that never really materialized, Intel 7 appears to have been pushed too hard, and now Intel 4 is low-yield. If ever there was a time for Intel's competitors to move in on marketshare, it's now. It does explain AMD's mobile-first push with Zen 5, even if it's only a few weeks earlier.

Update: Intel Accelerated Ireland EUV Fab Ramp-Up as Meteor Lake Chips Were In Short Supply

www.anandtech.com

Intel basically admitted that Intel 4 was struggling when they announced that Sierra Forest and Granite Rapids were moving to Intel 3. Sierra Forest went on sale in June and it has a much larger Intel 3 die than Meteor Lake's Intel 4 die, so it likely has much better yields.

 

[Panther_Seraphin]

The point is that Intel and AMD have become so interdependent on each others various x86 patents and licences that they are effectively joint owners of the modern x86 ISA. Neither AMD or Intel could threaten to withdraw their various x86 extensions without effectively losing the ability to make any modern x86 processor.

This is where the threat of Qualcomm/Apple Silicon is really starting to bite now. While Intel and AMD are almost unwilling partners in a symbiotic relationship at the moment Qualcomm and Apple especially with Rosetta are very quickly making it apparent that x86 has to bring something new/groundbreaking to the table otherwise there is a very viable alternative on the market. Especially in the mobile areas where insane battery life has been claimed for years from both camps but real life usage proves to be a lot lower, Apple/Qualcomm are leaving them completely in the dust without compromising performance.

If I was AMD/Intel I would be looking at RISC and going, we need to put some serious development here because I think purely relying on x86 could very quickly be a dead/dying architecture in the space of a few years.

Intel basically admitted that Intel 4 was struggling when they announced that Sierra Forest and Granite Rapids were moving to Intel 3. Sierra Forest went on sale in June and it has a much larger Intel 3 die than Meteor Lake's Intel 4 die, so it likely has much better yields.

This to me actually sounds complete the opposite and reeks of desperation. A more complex node (Intel 3) and its a LARGER die than the Intel 4 one its meant to replace with bigger yields? I am highly sceptical as that is not how it works in general!!! Newer generation nodes tend to take quite a while to get to equal failure rates as the previous nodes as the process matures in process and materials and Intel is saying that they have reversed this trend? Please excuse the mountain of salt I need to take with that statement.

The only way I would accept this is if their Intel 3 tech is being made in a completely different foundry to intel 4 and Intel 4 has a fundamental process/material/equiment failure that basically makes it basically unviable.

 

[Squared]

If I was AMD/Intel I would be looking at RISC and going, we need to put some serious development here because I think purely relying on x86 could very quickly be a dead/dying architecture in the space of a few years.

x86 CPUs started implementing good ideas from RISC philosophy back in the 90s. Since then, ARM has gotten a lot more complex so the differences between ARM and x86 aren't so extreme. And today it shows. Reviews that try to compare Zen 5 to Oryon show very similar native performance at very similar power draw. They're both TSMC N4 CPUs launched at about the same time.

This to me actually sounds complete the opposite and reeks of desperation. A more complex node (Intel 3) and its a LARGER die than the Intel 4 one its meant to replace with bigger yields? I am highly sceptical as that is not how it works in general!!! Newer generation nodes tend to take quite a while to get to equal failure rates as the previous nodes as the process matures in process and materials and Intel is saying that they have reversed this trend? Please excuse the mountain of salt I need to take with that statement.

Intel 4 is the trial run for Intel 3. Intel 3 is only a minor shrink over Intel 4. Sierra Forest has 144 cores on one die. Meteor Lake has 14 on one die.

 

[Tech Ninja]

People need to focus on the balance sheet at this point. Intel has ALOT of debt. They may have to restructure and issue tons of equity to reduce it.

 

[Vayra86]

Witness the godawful smell of burning old socks! Muahahaha. You will all burn with me! Or, degrade, at least.

-signed, Pat G

 

[wheresmycar]

4th Quarter dividend halting won't wash well with investor confidence. Previous post-pandemic large dividend cuts were already concerning alongside layoffs and reduced employee compensation. Back then you could have only imagined things looking up going forward but that doesn't seem to be the story here.

3-4 fold uptick in returns with 13/14th Gen (and thats not accounting for Intel direct returns) just makes matters worse. I bet AMDs already sharpening their crayons to draw some of that potentially traumatised marketshare and mindshare in red.

 

[Rullino32]

It's strange to see Intel struggling and AMD thriving, it used to be the other way around, almost every single PC I've seen when I was at school had an Intel CPU, from pre-school all the way up to high-school, I remember almost every ads from Euronics showing the Intel jingle whenever they've advertised a high-end computer with an Intel i7, nowadays i don't watch the TV as much as before, but I thought Intel has always been the reliable option since I've had an HP Pavilion PC with an Intel i3-2100 for over a decade, and I thought going for Intel would've made sense since it worked well for me, now that I've made some research about AMD CPUs, I'll consider going for them since they have better upgradability for desktops and good iGPU and possibly better battery life for laptops.

I've heard that Intel had some anti-competitive practices like buying OEM manufacturers to only use their CPUs and if they considered other options they'd be punished in a way or the other, I've heard something similar about Nvidia with their AI and Data Center GPUs, correct me if I'm wrong.

 

[Totally]

This is something that I don't know much about but I guess the question is can the x86 license be transferred to the buyer? I have heard that it can't be when the possibility that AMD could face bankruptcy years ago was discussed here.

Intel is the rights holder. It would be the rights that would be transferred not a license. Buyer would be getting the goose not the eggs.

 

[Super XP]

Intel should have come out earlier about their major CPU issues, but they kept denying it up until its too late.

It's strange to see Intel struggling and AMD thriving, it used to be the other way around, almost every single PC I've seen when I was at school had an Intel CPU, from pre-school all the way up to high-school, I remember almost every ads from Euronics showing the Intel jingle whenever they've advertised a high-end computer with an Intel i7, nowadays i don't watch the TV as much as before, but I thought Intel has always been the reliable option since I've had an HP Pavilion PC with an Intel i3-2100 for over a decade, and I thought going for Intel would've made sense since it worked well for me, now that I've made some research about AMD CPUs, I'll consider going for them since they have better upgradability for desktops and good iGPU and possibly better battery life for laptops.

I've heard that Intel had some anti-competitive practices like buying OEM manufacturers to only use their CPUs and if they considered other options they'd be punished in a way or the other, I've heard something similar about Nvidia with their AI and Data Center GPUs, correct me if I'm wrong.

Intel is well known & has been fined for anti -competitive practices for decades now. AMD is doing alright, but they ALWAYS seem to NOT take full advantage of Intel's misery or should I say miseries. And part of that problem is AMD still cannot meet supply demand for its products, where as Intel has the ability to pump more hardware into supply chains in a jiffy. Anyhow, I see AMDs processor market share increasing significantly in the next few quarters.

 

[csendesmark]

"Intel Financials Not Looking Good"
Are you some kind of detective?