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Intel Q12022 beats but offers disappointing guidance

I think this one is going to come back and bite him:

Pat Gelsinger
Yes. Thank you, Stacy. And clearly, we overachieved in Q1, right? Q2, we were -- it's a little bit lighter, right? Given some of those, we've taken it down a bit, given some of those factors, but not substantially. This is very in line with what we expected. We were always forecasting a stronger second half of the year. And that's what gives us confidence. We have built into our year guide, some room, right, for things to happen. Like any good company would we built some expectations that not everything goes right. And that's why we're very confident in reaffirming our overall yearly revenue guidance.

I do not think the second half will be strong at all. From the supply chain calls I have been on in 2021 there has been a strong move towards AMD's N7/N6 products and the N5 chips are coming out in 2022, correct? So I see more competition and less margins.

Also, with inflation and people getting back to the office I see a reduction in demand coming in 2H2022. MIL/AERO will see a bump though. Sound reasonable?
 
nickw said:
Intel has no choice, other than be a foundary, if it wants to survive long term.
Click to expand...

Intel and Samsung both lost the FinFET battle to TSMC, absolutely. GAA will be another battle. TSMC has been really quiet about the GAA plans. Hopefully we will hear more at the TSMC Symposium in June. As it is today I would say that Intel has the edge with 20/18A. There could be a lead change in 2025!

Pat Gelsinger
We'll have the test wafers on 20a and 18a, which we expect to be a big foundry node as well. So I'll say, overall, the technology pipeline is doing tremendously well and really proud of our teams there.
 
Intel CAPEX is lumpy:

Vivek Arya
So the Q1 CapEx was about $4.6 billion, suggests a very big ramp in the back half to get to your $27 billion net CapEx target. We are hearing of a lot of constraints on equipment supply. I was hoping, Pat or David, if you could give us some color on the availability of tools and if there are any implications on your full year sales outlook because of the availability of tools?

Pat Gelsinger
Yes, I'll start with that one, and then Dave, you can add. Overall, CapEx is lumpy as we go through the year. And as such, we think overall that we'll still be on track to the overall CapEx target that we laid out.

Ross Seymore
I think we feel confident about the $28 billion growth CapEx. The $27 billion net CapEx obviously assumes a $1 billion of capital offsets.

If I was a betting man, and I am, I would bet that Intel does not hit $27B CAPEX this year and let's blame the equipment people for not expediting Intel orders over TSMC and Samsung.
 
Fred Chen said:
As just another fabless processor design company, it could be even more competitive for Intel. But fab power doesn't seem to provide Intel with the advantage it once had.
Click to expand...
That's for sure, but Intel also allowed themselves to fall behind in CPU, GPU, networking, and FPGA technologies. These products would not win in the datacenter, HPC, laptops, or cloud networks, not to mention mobile devices. And there's the loss of Apple's Mac business, while Mac volumes are climbing dramatically. Amazon and Ampere have enabled ARM to make inroads into cloud datacenters. I don't think for any of these businesses a "one generation ahead" fab process (as Craig Barrett used to say) would have made a difference. Intel has basic merchant chip product architecture problems, and IMO the pain won't stop until the real innovation starts.
 
By way of getting our thinking straight, it bears noting that intels MO as a fab has been very different from the pure fab model of tsmc.

intel has used its fab lead as leverage to dominate markets for the end product. Advances with no market advantage gained held little interest for them.

even recently, optane, a fine product, was made so exclusive that the market gave up on it and it ultimately failed to gain traction.

They may have done some sub-contract fabbing, but most was intel brand chips.

This mindset was part of them ignoring the inevitable demise of moores law.

with 100% of the server market anyway, & several year lead in process, why do a complete over haul of products (a switch to chiplets) for no gain to intel?

they didnt see zen coming - it (32 core epyc & 8/16 core desktop) gained a foot hold even w/ crap Glofo process initially, & then the 10nm debacle & tsmc turned attrition into a route.

Samsung have a foot in both models - consumer SSDs eg., but they seem troubled too
 
libranskeptic said:
re amazon choosing arm, to be fair, they faced no supply from amd vs crap from intel. not nice.
Click to expand...
I think there's a deeper justification. Graviton gives Amazon a huge cost advantage over merchant chips, from anyone, and their users in AWS get to specify what they want without competing with broad-market requirements. And I think Google and Microsoft are working as fast as they can to have their own server CPUs too, because they're watching Amazon succeed, especially with EC2, and thinking, "Hey! We can do that!".
 

"Here is the important math. In Q1 2021, operating profits were 34.5 percent of revenues, which is a long way down from that 50 percent level Intel’s Data Center Group had in the heyday between 2010 and 2018, with a few bad quarters in the mix. In Q1 2022, operating profits fell further to 27.9 percent of revenues.

It is very hard to for Intel to throw off the cash it needs to build foundries just at the time it needs a lot of cash to build foundries. If Intel had used its cash to build foundries over the past decade and did more investing in research and development and did not rest on its 22 nanometer and 14 nanometer laurels, it might not be in this bind. All of those share buybacks and expensive acquisitions that did not lead to revenues and profits now come home to roost.

With Gelsinger at the helm, it seems there will be a lot more focus on the core businesses, but as we said above, it seems unlikely that competitive pressures and the ever-higher costs of manufacturing compute, networking, and storage engines will allow Intel to return to anything like the profitability it once enjoyed in the glass house."

intel-q1-2022-datacenter-ai.jpg
 
libranskeptic said:
By way of getting our thinking straight, it bears noting that intels MO as a fab has been very different from the pure fab model of tsmc.

intel has used its fab lead as leverage to dominate markets for the end product. Advances with no market advantage gained held little interest for them.

even recently, optane, a fine product, was made so exclusive that the market gave up on it and it ultimately failed to gain traction.

They may have done some sub-contract fabbing, but most was intel brand chips.

This mindset was part of them ignoring the inevitable demise of moores law.

with 100% of the server market anyway, & several year lead in process, why do a complete over haul of products (a switch to chiplets) for no gain to intel?

they didnt see zen coming - it (32 core epyc & 8/16 core desktop) gained a foot hold even w/ crap Glofo process initially, & then the 10nm debacle & tsmc turned attrition into a route.

Samsung have a foot in both models - consumer SSDs eg., but they seem troubled too
Click to expand...
Recently I started thinking if Intel does retake the technology leadership in semiconductor manufacturing around 2025, will that solve Intel's problems?

I believe Intel biggest problem is not in their manufacturing. They can work day and night to build the best fabs in the world. But the world buys Intel competitors' CPU, APU, SoC, FPGS, and GPU is because they offer better design, features, price, performance, and/or power usage. It's not because AMD, Nvidia, Qualcomm, and MediaTek have fabs. Actually very often Intel doesn't have the right products customers need. Many fabless chip makers are enjoying double-digit growth since last year while owning no fab. They take market shares by offering superior products or unique products that Intel doesn't have.

Intel is a product company, not a service company. The new Intel Foundry Service (IFS) is definitely going towards a service model. But in reality it can only contribute a relatively small revenue for next several years. Majority of Intel 2022 $76 billion revenue will be coming from Intel's products instead of service. In Q1 2022 IFS generated 1.5% of Intel's Q1 revenue. Intel needs to fix their product lineup problems more than their fabs.
 
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AMD just released their Q1 2022 earnings. They achieved a stunning 71% gross revenue growth. Excluding the new acquired Xilinx revenue, AMD still achieved about 55% quarterly revenue growth YoY. I have updated the Q1 earnings comparison for major semiconductor companies below:

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)
 
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After paying TSMC huge fabrication cost, AMD have the same gross margin as Intel.

You can tell TSMC cost is a lot lower than Intel cost.
 
VCT said:
After paying TSMC huge fabrication cost, AMD have the same gross margin as Intel.

You can tell TSMC cost is a lot lower than Intel cost.
Click to expand...
I’m not so sure about that. I think it’s more likely AMD is achieving higher product gross margins than Intel because their products are just plain better.
 
hist78 said:
AMD just released their Q1 2022 earnings. They achieved a stunning 71% gross revenue growth. Excluding the new acquired Xilinx revenue, AMD still achieved about 55% quarterly revenue growth YoY. I have updated the Q1 earnings comparison for major semiconductor companies below:

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)
Click to expand...
NXP Semiconductors also released their Q1 2022 earnings on Monday.

• Revenue was $3.14 billion, up 22.2% year-on-year;
• GAAP gross margin was 56.7 percent, and GAAP operating margin was 27.8 percent;
• Non-GAAP gross margin was 57.6 percent, and non-GAAP operating margin was 35.7 percent;
• Cash flow from operations was $856 million, with net capex investments of $279 million, resulting in non-GAAP free cash flow of $577 million;


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)
 
onsemi announced results for the first quarter of 2022 on May 2, 2022 with a 31% YoY growth.


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)
 
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Due to additional semiconductor companies' earnings data are keep coming everyday, I started posting updated revenue growth comparison in a standalone thread.

So far Intel Q1 2022 is the worst in the semiconductor industry.

Semiconductor Companies Q1 2022 Revenue Growth (Excluding equipment, software, and materials manufacturers)

May 4, 2022 Update: Added Wolfspeed earnings Wolfspeed, Inc. (NYSE: WOLF), formerly known as Cree, Inc., today announced revenue of $188.0 million for its third quarter of fiscal 2022, ended March 27, 2022. This represents a 37% increase compared to revenue from continuing operations of $137.3...
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Q1 2022 vs. Q1 2021 Revenue (Excluding equipment manufacturers):

Intel: -7% (-1% non GAAP, -7% GAAP)
ams OSRAM: -3%
SkyWater Technology: 0%
Power Integrations Inc: 5%
Qorvo: 8.72% (GAAP, Fiscal Q4 2022 compare to Fiscal Q4 2021)
TI: 14%
Skyworks Solutions: 14% (Fiscal Q2 2022 ending March 31, 2022)
STMicroelectronics: 17.6%
Melexis NV: 18%
Alpha and Omega Semiconductor: 20%
ASE Group: 21%
NXP: 22.2%
Micron: 25% (Fiscal Quarter ended March 3, 2022)
Realtek: 27.49%
onsemi: 31%
MediaTek: 32.1%
UMC : 34.7%
TSMC: 36%
Wolfspeed: 37% (Third quarter of fiscal 2022, ended March 27, 2022.)
Samsung Memory: 39%
Qualcomm: 41%
SK Hynix: 43%
Silicon Laboratories: 48%
Renesas Electronics: 70.2% (Non-GAAP)
AMD: 71% (GAAP and Non-GAAP, 55% if excluding Xilinx)
SiTime Corporation: 97.7%
 
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