Intel - "PC sales are softening" / AMD - PC CPU sales rise 33% YoY

[blueone]

Intel beats but offers disappointing guidance

Intel called for weaker-than-expected second-quarter earnings and revenue as it plans exapansion through factories in the U.S. and Germany.

www.cnbc.com

Intel’s Client Computing Group, which includes PC chips, produced $9.29 billion in revenue, down 13% and below the $9.42 billion consensus estimate among analysts surveyed by Refinitiv. Research firm Gartner had estimated that PC shipments fell 6.8% during the quarter, and on Tuesday Microsoft said it saw strength in the business PC market, boosting Windows license sales from device makers.

AMD sales jump 71%, shrugging off concerns about PC slowdown

AMD reported first-quarter earnings after the bell on Tuesday, beating analyst estimates for earnings and revenue.

www.cnbc.com

PC sales are reported in AMD’s computing and graphics segment, which rose 33% on an annual basis and was 8% higher than the December quarter. AMD said that the increase was driven both by central processors and graphic processor sales, and that the average sales price for Ryzen processors rose during the quarter.

Even Apple had a party at Intel's expense:

Mac shipments grew in Q1 2022 as PC market slumped | AppleInsider

Apple's Mac business is continuing to enjoy growth in Q1 2022, according to IDC, with shipments continuing to rise year-on-year in the period while the PC market slows down.

appleinsider.com

I hope Intel has a plan other than the same old same old one.

[Edit - fixed the bad Intel article link.]

 

[hist78]

Excluding the new acquired Xilinx revenue, AMD still achieved about 55% quarterly revenue growth YoY.

I have posted a revenue growth comparison in another thread for those major semiconductor companies who have released earnings data for Q1 2022.


Post in thread 'Intel Q12022 beats but offers disappointing guidance' https://semiwiki.com/forum/index.ph...ffers-disappointing-guidance.15953/post-52285

 

[Daniel Nenni]

Excluding the new acquired Xilinx revenue, AMD still achieved about 55% quarterly revenue growth YoY.
I have posted a revenue growth comparison in another thread for those major semiconductor companies who have released earnings data for Q1 2022.
Post in thread 'Intel Q12022 beats but offers disappointing guidance' https://semiwiki.com/forum/index.ph...ffers-disappointing-guidance.15953/post-52285

Astonishing results. With these numbers I can assure you a semiconductor slowdown is coming, absolutely.

Q1 2022 vs. Q1 2021 Revenue (Excluding equipment manufacturers):
Intel: -1% (-1% non GAAP, -7% GAAP)
TI: 14%
Micron: 25% (Fiscal Quarter ended March 3, 2022)
MediaTek: 32.1%
UMC : 34.7%
TSMC: 36%
Samsung Memory: 39%
Qualcomm: 41%
SK Hynix 43%
AMD: 71% (GAAP and Non-GAAP, 55% if excluding Xilinx)

 

[jms_embedded]

re: thread title -- Lisa Su mentioned this in the AMD earnings call (SA transcript)

Although, the PC market is experiencing some softness coming off multiple quarters of near-record unit shipments, our focus remains on the premium, gaming and commercial portions of the market where we see strong growth opportunities and we expect to continue gaining overall client revenue share.

 

[hist78]

re: thread title -- Lisa Su mentioned this in the AMD earnings call (SA transcript)

Although, the PC market is experiencing some softness coming off multiple quarters of near-record unit shipments, our focus remains on the premium, gaming and commercial portions of the market where we see strong growth opportunities and we expect to continue gaining overall client revenue share.

In the old days Intel used to command the premium/high end/high price of CPU market while AMD offered cheaper/lower to medium range of the CPU.

Nowadays it seems Intel and AMD are switching their places.

 

[hist78]

Astonishing results. With these numbers I can assure you a semiconductor slowdown is coming, absolutely.

Q1 2022 vs. Q1 2021 Revenue (Excluding equipment manufacturers):
Intel: -1% (-1% non GAAP, -7% GAAP)
TI: 14%
Micron: 25% (Fiscal Quarter ended March 3, 2022)
MediaTek: 32.1%
UMC : 34.7%
TSMC: 36%
Samsung Memory: 39%
Qualcomm: 41%
SK Hynix 43%
AMD: 71% (GAAP and Non-GAAP, 55% if excluding Xilinx)

I added NXP revenue data that was released on Monday. Like many semiconductor peers NXP Q1 2022 performance is good.

Intel's -1% is really an odd case. By looking at the following list we can tell the whole industry is growing across multiple segments in both leading edge or mature processes.

Q1 2022 vs. Q1 2021 Revenue (Excluding equipment manufacturers):

Intel: -1% (-1% non GAAP, -7% GAAP)
TI: 14%
NXP: 22.2%
Micron: 25% (Fiscal Quarter ended March 3, 2022)
MediaTek: 32.1%
UMC : 34.7%
TSMC: 36%
Samsung Memory: 39%
Qualcomm: 41%
SK Hynix: 43%
AMD: 71% (GAAP and Non-GAAP, 55% if excluding Xilinx)

 

[hist78]

onsemi announced results for the first quarter of 2022 on May 2, 2022 with the following highlights:

• Record revenue of $1,945.0 million, an increase of 31 percent year-over-year
• GAAP diluted earnings per share of $1.18 as compared to $0.20 in the quarter a year ago
• Record non-GAAP diluted earnings per share of $1.22 as compared to $0.35 in the quarter a year ago
• Record GAAP and non-GAAP gross margin of 49.4 percent increased 1,420 basis points year-over-year
• Record GAAP operating margin of 33.3 percent increased 730 basis points quarter-over-quarter and 2,480
basis point year-over-year
• Record non-GAAP operating margin of 33.9 percent increased 530 basis points quarter-over-quarter and
2,060 basis points year-over-year
• LTM free cash flow margin of 20.8%

Q1 2022 vs. Q1 2021 Revenue (Excluding equipment manufacturers):

Intel: -1% (-1% non GAAP, -7% GAAP)
TI: 14%
NXP: 22.2%
Micron: 25% (Fiscal Quarter ended March 3, 2022)
Onsemi: 31%
MediaTek: 32.1%
UMC : 34.7%
TSMC: 36%
Samsung Memory: 39%
Qualcomm: 41%
SK Hynix: 43%
AMD: 71% (GAAP and Non-GAAP, 55% if excluding Xilinx)

 

[blueone]

Astonishing results. With these numbers I can assure you a semiconductor slowdown is coming, absolutely.

Q1 2022 vs. Q1 2021 Revenue (Excluding equipment manufacturers):
Intel: -1% (-1% non GAAP, -7% GAAP)
TI: 14%
Micron: 25% (Fiscal Quarter ended March 3, 2022)
MediaTek: 32.1%
UMC : 34.7%
TSMC: 36%
Samsung Memory: 39%
Qualcomm: 41%
SK Hynix 43%
AMD: 71% (GAAP and Non-GAAP, 55% if excluding Xilinx)

I think some semi companies will see a slowdown, like the memory companies, because buyers build inventory and then burn it off. I'm not convinced with foundries; I doubt they'll have excess capacity for three years, just based on long it takes for new capacity to come online. Companies like Qualcomm and Broadcom, maybe. Much of their volume are cloud companies, and the cloud companies have lumpy acquisition patterns. And, as they switch to internal designs, it'll leave foundry demands high but nick the merchant chip vendors. Maybe AMD keeps their head above water for longer, but they'll still get hit hard eventually by cloud companies' internal designs. But there's so much customer demand driven by embedded computation in almost everything and so many companies investing in AI applications... it is difficult to see how a slowdown happens in the new stuff. Probably just in what I'll call legacy client and server computing. Just my guess.

The chip making equipment companies... wow, what a mess. Massive, perhaps unjustified demand is there for years yet (driven by politics), but their supply chains are a such a mess. I'm surely not smart enough to predict when the mess clears up. Globalization run amuck.

 

[Portland]

 

[count]

I think some semi companies will see a slowdown, like the memory companies, because buyers build inventory and then burn it off. I'm not convinced with foundries; I doubt they'll have excess capacity for three years, just based on long it takes for new capacity to come online. Companies like Qualcomm and Broadcom, maybe. Much of their volume are cloud companies, and the cloud companies have lumpy acquisition patterns. And, as they switch to internal designs, it'll leave foundry demands high but nick the merchant chip vendors. Maybe AMD keeps their head above water for longer, but they'll still get hit hard eventually by cloud companies' internal designs. But there's so much customer demand driven by embedded computation in almost everything and so many companies investing in AI applications... it is difficult to see how a slowdown happens in the new stuff. Probably just in what I'll call legacy client and server computing. Just my guess.

The chip making equipment companies... wow, what a mess. Massive, perhaps unjustified demand is there for years yet (driven by politics), but their supply chains are a such a mess. I'm surely not smart enough to predict when the mess clears up. Globalization run amuck.

Remember that the major expansions broke ground around 1-2 years ago and are well into construction now. I think it’ll be more like oversupply in 1-2 years.

 

[blueone]

Remember that the major expansions broke ground around 1-2 years ago and are well into construction now. I think it’ll be more like oversupply in 1-2 years.

Which new fabs are those? The ones in Europe and most in the US aren't coming on line for 3-5 years. Intel's new fabs in Arizona go online in 2024, though the D1X expansion in Oregon is finished, but does that really count for anyone but Intel? I assume you're talking about Samsung's new fabs in Korea and whatever TSMC is building Taiwan?

 

[tooLongInEDA]

Didn't Pat Gelsinger say that "AMD is now in the rear view mirror" only a few months ago ?

There's a famous TV advertisement in the UK for a glasses retailer: "Should have gone to SpecSavers".

 

[blueone]

Didn't Pat Gelsinger say that "AMD is now in the rear view mirror" only a few months ago ?

There's a famous TV advertisement in the UK for a glasses retailer: "Should have gone to SpecSavers".

Good memory:

Intel CEO: AMD Is in the 'Rear View Mirror' After Alder Lake CPU Launch

'And never again will they (AMD) be in the windshield,' Pat Gelsinger says in the New Year's message.

www.pcmag.com

 

[Paul2]

re: thread title -- Lisa Su mentioned this in the AMD earnings call (SA transcript)

Although, the PC market is experiencing some softness coming off multiple quarters of near-record unit shipments, our focus remains on the premium, gaming and commercial portions of the market where we see strong growth opportunities and we expect to continue gaining overall client revenue share.

PC updates are coming in waves, very visible waves to anybody who dealt with hardware sales. 2020 was a perfect storm of laptop market being very stale after years of "boring" laptop upgrades, China getting over CoVID fast, and work from home. I knew people who stayed on the same laptop since first gen SkyLake, and who got a new one in 2020-2021. A surprising number have downgraded relatively though.

The sales hit of the CoVID season was a laptop with cheap internals, but good, large screen, and battery time.

 

[hist78]

Good memory:

Intel CEO: AMD Is in the 'Rear View Mirror' After Alder Lake CPU Launch

'And never again will they (AMD) be in the windshield,' Pat Gelsinger says in the New Year's message.

www.pcmag.com

A while ago I saw a TSMC document talking about TSMC's "Values and Business Philosophy".

Values and Business Philosophy - Taiwan Semiconductor Manufacturing Company Limited

TSMC Core Values Integrity Integrity is our most basic and most important core value. We tell the truth. We believe that the record of our accomplishments is the best proof of our merit. Hence, we do not brag.

www.tsmc.com

It said:

"With competitors, we compete to our fullest within the limits of the law, but we do not slander them in order to gain benefit for ourselves. We also respect intellectual property rights of others."

I don't know to what extent TSMC has achieved on this principle. But I do know this "No Slander" spirit is not in the Intel employees' training materials, at least not in the copy Pat Gelsinger received.

 

[blueone]

A while ago I saw a TSMC document talking about TSMC's "Values and Business Philosophy".

Values and Business Philosophy - Taiwan Semiconductor Manufacturing Company Limited

TSMC Core Values Integrity Integrity is our most basic and most important core value. We tell the truth. We believe that the record of our accomplishments is the best proof of our merit. Hence, we do not brag.

www.tsmc.com

It said:

"With competitors, we compete to our fullest within the limits of the law, but we do not slander them in order to gain benefit for ourselves. We also respect intellectual property rights of others."

I don't know to what extent TSMC has achieved on this principle. But I do know this "No Slander" spirit is not in the Intel employees' training materials, at least not in the copy Pat Gelsinger received.

This is me holding my tongue, and not just ghosting your comment.

 

[Portland]

Intel needs to be taken with a grain-of-salt because the company didn't realize chiplets were an existential threat a decade ago and chiplets are a tip-of-the-iceberg.

 

[blueone]

Intel needs to be taken with a grain-of-salt because the company didn't realize chiplets were an existential threat a decade ago and chiplets are a tip-of-the-iceberg.

Intel was internally working on "tiled die" research in the labs and discussing it in the product groups well over ten years ago. I was in some of those discussions. All of the advantages and disadvantages which are openly discussed now were discussed back then internally.

As for why I think Intel didn't embrace chiplets earlier (purely my speculation, since I wasn't involved in the process)... if you really don't need chiplets, because you think your fabs can do a large enough monolithic die with great yields and reasonable cost, IMO, you'll stay with a monolithic design. Everything is faster and denser on a single die, and, probably more importantly, if you've been doing single die CPUs for a long time with a mostly incremental architecture, and your fab says, "Yup, no problem", your design engineering management is unlikely to propose taking the risks of a redesign for switching to chiplets unless they really have to.

AMD's CPUs were heavy-duty redesigns for chiplets, as I understand it, and AMD did not have internal fabs making bold promises. I can only guess at the issues and costs AMD was presented with by TSMC for big dies in leading-edge fab processes.

Intel has a lot of problems, but Intel also has a lot of great engineers, but even great engineers can be backed into a corner by a strategy that doesn't play out the way it's supposed to.

 

[benb]

Here's what Abhinav Davuluri is saying to justify a bullish position ($65 FVE) on Intel stock
- Secular PC decline and relative lack of competition from AMD contributed to Intel delaying its 10-nm process ramp
- Intel had less incentive to rush out its new 10-nm process, as new processes are typically margin-dilutive while ramping
- Intel 4 with EUV will greatly simplify its manufacturing process flow
- Intel has an opportunity to regain manufacturing leadership if it can better deploy GAA
- Intel is the TSMC alternative for many products to avoid concentration risk
- Fab cost $20B plus creates significant barriers to entry
- Intel's only competition for leading-edge manufacturing are TSMC and Samsung
- Only Intel and AMD have x86 architecture providing differentiation
- ARM-based datacenter chips have had little success in displacing x86
- ARM-DC chips are used in less intensive workloads, a small niche application
- Revenue decline is due to divesting NAND business to SKHynix

 

[Xebec]

Here's what Abhinav Davuluri is saying to justify a bullish position ($65 FVE) on Intel stock
- Secular PC decline and relative lack of competition from AMD contributed to Intel delaying its 10-nm process ramp
- Intel had less incentive to rush out its new 10-nm process, as new processes are typically margin-dilutive while ramping
- Intel 4 with EUV will greatly simplify its manufacturing process flow
- Intel has an opportunity to regain manufacturing leadership if it can better deploy GAA
- Intel is the TSMC alternative for many products to avoid concentration risk
- Fab cost $20B plus creates significant barriers to entry
- Intel's only competition for leading-edge manufacturing are TSMC and Samsung
- Only Intel and AMD have x86 architecture providing differentiation
- ARM-based datacenter chips have had little success in displacing x86
- ARM-DC chips are used in less intensive workloads, a small niche application
- Revenue decline is due to divesting NAND business to SKHynix

FWIW - re:: forecasted revenue decline -

Intel's NAND Flash revenue was $5.6B in 2020; up from $4.4B the year before. For 2021 it was probably going to land somewhere inbetween the two; revenue was $1.11B in Q3 2021, and $1.10B in Q2 2021.

OTOH - Intel is launching ARC this year, representing an entirely new product line. Intel committed to shipping "at least 4 million ARC GPUs in 2022 at an average price of $75" according to sources, for a revenue gain of $0.3B anticipated.