Intel’s horrible quarter revealed an inventory glut and underused factories

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The earnings report, which was the eighth under CEO Pat Gelsinger’s leadership, shows a legendary technology company struggling with many factors outside of its control, including a deeply slumping PC market. It also highlights some of Intel’s current issues with weak demand for its current products and inefficient internal performance, and underscores how precarious the company’s financial health has become.

 

“Clearly, the financials aren’t what we would hoped,” Gelsinger told analysts.

 

In short: Intel had a difficult 2022, and 2023 is shaping up to be tough as well.

 

Here are some of the most concerning bits from Intel’s earnings report and analyst call:

 

Weak and uncertain guidance

Intel didn’t give full-year guidance for 2023, citing economic uncertainty.

But the data points for the current quarter suggest tough times. Intel guided for about $11 billion in sales in the March quarter, which would be a 40% year-over-year decline. Gross margin will be 34.1%, a huge decrease from the 55.2% in the same quarter in 2021, Gelsinger’s first at the helm.

 

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AMD is also facing similar macro-economic challenges, but they have been taking market share from Intel in both the PC and enterprise space for a while.  

 

 

Edited January 27, 2023 by UltraMega

[UltraMega]

A few years ago AMD had less than 1% market share in the server space. Now they have 22% and they're hoping to reach 30% by the end of the year. Intel is facing a level of competition they haven't seen in almost two decades.

 

AMD is actually crushing it right now from everything I'm hearing. The 7900XTX is actually selling really well apparently, and 7000 series CPU sales are really picking up, on top of their new-found success in the server market.