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I think Intel CFO David Zinsner tried to paint a gloomy picture for Intel's second quarter and second half 2022, if I understand his words correctly. And Intel believes every company in the semiconductor industry is facing the same difficulties. If Intel's performance for 2021 and Q1 2022 can give us any hints, I think Intel will have the potential to be one of the worst companies in overcoming those difficulties.
Presenter SpeechVivek Arya Everyone, I know people are still trickling in, but welcome to this afternoon session. Really delighted to have the team from Intel. I'm Vivek Arya. I cover
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"Question
Vivek Arya (Analysts)
Makes sense. Maybe then Dave, stepping on to the demand side. As we were just talking before the session that there appears to be kind of this dichotomy between where investors and the market demand is going versus semiconductor companies, right, who are mostly sounding pretty strong about backlog and demand signals and so forth. What's on your dashboard from a demand perspective? What's going well? What's not going well?
Answer
David Zinsner (Intel CFO)
Good question. I think on the macro side, clearly, it's weaker. And we, like everyone else, will be impacted by the macro events that are unfolding here more recently. That's clearly going to impact us, as it will virtually everybody else in not only the semiconductor industry but globally in terms of corporations.
For us, the other thing was we had 3 kind of headwinds coming into the quarter, which we talked about. One was the match set issue where customers could not get enough components to build product. That was we expected to impact demand. The second was inventory. We expected customers to reduce their inventory levels, which would impact their demand on us. And then there was the China, Shanghai closure and we expected that to open up in early May. And it takes time to get back to normal but get back to normal on a relatively quick fashion.
I think in all 3 cases, the circumstances at this point are much worse than what we had anticipated coming into the quarter. So that certainly is an impact to the business as well. I think when you look at it over the long term, though, it's -- semiconductor industries have cycles to them. Every company within the semiconductor industry has a slightly different cycle to them, and that's how we're used to managing through those things."
I know you shouldn’t pull one comment out of context, etc, etc. But corporate IR people, which is part of David’s role, they say everything so carefully and blandly, sort dial the information content to language back to close to zero.
”Cycles” is thus code for “earnings recession”, in my opinion.
From this BoA event, we also learned that the official release of Sapphire Rapids will be delayed again towards the end of 2022. I'm not sure what exactly the problem Intel is encountering now. Sandra Rivera, Intel Data Center product group chief, said the reason is that more validation is needed. It's the same reason Intel gave back in June 2021 for delaying Sapphire Rapids to 2022.
Does that mean Sapphire Rapids have a lot compatibility problems or it is very buggy?
I know you shouldn’t pull one comment out of context, etc, etc. But corporate IR people, which is part of David’s role, they say everything so carefully and blandly, sort dial the information content to language back to close to zero.
”Cycles” is thus code for “earnings recession”, in my opinion.
It's not limited to Intel's IR people. Frequently when I read an Intel executive's speech or interview, I feel I need to use a lot more brain power to find out the true meanings from those beautiful but often meaningless words.
I believe it's a bad culture and Intel must change it.
It's not limited to Intel's IR people. Frequently when I read an Intel executive's speech or interview, I feel I need to use a lot more brain power to find out the true meanings from those beautiful but often meaningless words.
I believe it's a bad culture and Intel must change it.
My opinion is, there is an ongoing change in how people relate to language. Language and action are closer together now; some equate language to violence or stress. True to a point, the limiter being, if we stop communicating bad news, the bad news doesn't go away, and it may be even more distressing to find out the truth in the end. This change in language and culture has been called "the three great untruths" by Greg Lukianoff and Jonathan Haidt.
The one that results in word-mush is "What doesn't kill you makes you weaker". The untruth goes, you'll harm people if they are stressed out by too-harsh language or you bring information contrary to their expectations ("moral clarity"). There is literally harm inflicted when you pop someone's thought bubble.
Intel shareholders can't handle the stress from using the words "earnings recession". Plus it has other consequences; they might sell their shares.
My opinion is, there is an ongoing change in how people relate to language. Language and action are closer together now; some equate language to violence or stress. True to a point, the limiter being, if we stop communicating bad news, the bad news doesn't go away, and it may be even more distressing to find out the truth in the end. This change in language and culture has been called "the three great untruths" by Greg Lukianoff and Jonathan Haidt.
The one that results in word-mush is "What doesn't kill you makes you weaker". The untruth goes, you'll harm people if they are stressed out by too-harsh language or you bring information contrary to their expectations ("moral clarity"). There is literally harm inflicted when you pop someone's thought bubble.
Intel shareholders can't handle the stress from using the words "earnings recession". Plus it has other consequences; they might sell their shares.
The rumor for delaying Sapphire Rapids is compatibility. Intel seems to be too busy to solve those problem so they asked partners to help them solve those problems.
Same thing happened to consumer GPU. The desktop gaming GPU was supposed to launched in Jan then postpone to March and now it could be July.
The rumor for delaying Sapphire Rapids is compatibility. Intel seems to be too busy to solve those problem so they asked partners to help them solve those problems.
Same thing happened to consumer GPU. The desktop gaming GPU was supposed to launched in Jan then postpone to March and now it could be July.
I can understand Intel is relatively new to discrete GPU and the development/compatibility/validation may take much longer than expected. But Sapphire Rapids is a server CPU that Intel has many years of experience and released many generations of server CPU before already. I don't think the design and comparability can be in that much trouble.
I can understand Intel is relatively new to discrete GPU and the development/compatibility/validation may take much longer than expected. But Sapphire Rapids is a server CPU that Intel has many years of experience and released many generations of server CPU before already. I don't think the design and comparability can be in that much trouble.
Honestly even the dGPU is questionable.. they've had Xe graphics already for atleast 18 months in shipping products (i.e. Rocket Lake launched q1 2021, iris Xe max Nov 2020 ) and you can't even buy a low end mobile ARC based on the Xe architecture 3 months after "launch".
I'd like to know the real story here. The emotional side of me observes the same leader who had trouble and with launching (and way over promising performance of) Vega graphics at AMD, is the same leader in front of Arc.
OTOH you're right they're going up against companies with 30+ years of maturity in this space. And a lot of software have unique Nvidia and AMD code even though there are "universal" APIs..
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