But revenues fell nominally by only one percent.
At the end of the working week, Intel published a report that was quite difficult for investors and shareholders to understand, as noted CNBC citing official statistics. Revenue fell 1% year-on-year to $12.8 billion, but sales of various products overall increased the company’s core revenue by 4% to $11.8 billion. However, the quarter as a whole turned out to be unprofitable, as the company lost $1.61 billion during the reporting period.
Image source: Intel
The client division increased its revenue by 9% to $7.4 billion, while the server division reduced its revenue by 3% to $3 billion. Network solutions and products for edge computing reduced core revenue by 1% to $1.3 billion. The Intel Foundry division, whose reporting also reflects the company’s expenses on the production of products for its own needs, demonstrated revenue growth of 4% to $4.3 billion. At the same time, the division’s operating losses for the year increased from $1.4 to $2.9 billion.
Intel management hopes that 2024 will be a turning point for the company’s manufacturing division, as it will start operating profitably in the future. Currently, Intel’s production costs are affected by the fact that the company processes about 85% of silicon wafers without using EUV lithography. However, Lunar Lake and Arrow Lake processors will be manufactured primarily by TSMC in the coming quarters, and therefore Intel will not be able to influence their production costs much. The company will begin manufacturing processors using Intel 18A technology this half of the year, but their mass deliveries will not begin until next year. At that stage, the concentration of technological operations at Intel’s own enterprises will allow the company to more flexibly manage production costs.
However, the first Intel client processors to switch to this process technology will be the Panther Lake family, and the company will introduce them only in the second half of next year. Accordingly, in the client segment, the impact of this factor will be minimal for most of next year. After the publication of such a quarterly report, which was accompanied by reports of the need to sharply reduce costs, the company’s shares fell in price by more than 20% in preliminary trading.
