$14 billion is still better than us
2022 is a tough year overall, and that’s reflected in Intel’s earnings call late yesterday. Overall revenue for the year decreased by 20% compared to 2021. 16% lower if you prefer non-GAAP earnings. $63.1 billion total. For the fourth quarter alone, revenues of $14 billion reflected revenues down 32% and non-GAAP down 28%. Those earnings are on a scale that competitors can only dream of, but they’re a big deal for Intel.
Broken down, both the Client Computing and Data Center groups experienced a drop in revenue of more than 30%. This reflects market conditions. Consumers and businesses simply didn’t have the budget to buy the previous amount of chips. The Raptor Lake launch came at an unlucky time, with Intel failing to recoup its investment in development. Meanwhile, MobileEye, Foundry Services, and Accelerated Computing and Graphics increased, but these service lines represent only a small portion of Intel’s total revenue.
This has already affected Intel as they have decided to abandon their network switch business altogether. They bought Barefoot Network only three years ago, but that IP alone apparently wasn’t enough to compete with the established players in the network business. The Network And Edge Group may be around for a while to support existing customers, but there won’t be any shiny new kits coming out.
The second victim is a little more of a surprise. Intel has announced the end of the RISC-V program Pathfinder. This will go into effect soon, suggesting existing customers should find his RISC-V supplier in third parties for future support or development. Some of his other RISC-V projects will survive, so Intel isn’t abandoning that architecture entirely, but the Pathfinder program is dead.
During the earnings call, Pat Gelsinger suggested further cuts could be made, but did not specify where.
