News Intel 4Q21 Earnings

Hitman928

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  • Intel press release (NASDAQ:INTC): Q4 Non-GAAP EPS of $1.09 beats by $0.18.
  • Revenue of $19.5B (+4% Y/Y) beats by $1.14B.
  • Client Computing revenue of $10.1B.
  • Data Center Group revenue of $7.3B.
  • GM at 53.6% GAAP, down 3.2ppt y/y.
  • Q1 Guidance: Non-GAAP Revenue of $18.3B vs. $17.63B consensus, EPS of $0.80 vs. $0.77 consensus.

More to come when I have time to dig through the results.
 

jpiniero

Lifer
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Oh nice, Intel somehow managed to have a nice volume and ASP gain in DCG yet still had lower income. CCG's income is also much lower.
 

moinmoin

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From page 4 of the press release: For Q1 2022 they expect a gross margin of 49% and earnings per share of $0.70.

Honestly glad to see that internal accounting is more humble than Pat's public presence lately.
 

Markfw

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Is it that they priced alder lake really good, as to why GM is down ? What role does the server segment play in both of these numbers ? If it does, I can see why, as Milan should be hurting them bad, and Genoa around the corner. I mean I know the server market is slow, but Naples, why not near as good as Milan, was out 5 years ago, and I think still beat what Intel had, and Rome, 3 years old was killer, and we know Milan is even better.

Anyway, I am looking for more translations on these earnings. And what Alder lake may have contributed to them.
 

jpiniero

Lifer
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Is it that they priced alder lake really good, as to why GM is down ?
10 nm basically.

Edit: This is Intel's first year in a long time with positive desktop volume. That's not because of Alder Lake though, that's because of WFH last year and now RTO.
 
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moinmoin

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Is it that they priced alder lake really good, as to why GM is down ? What role does the server segment play in both of these numbers ? If it does, I can see why, as Milan should be hurting them bad, and Genoa around the corner. I mean I know the server market is slow, but Naples, why not near as good as Milan, was out 5 years ago, and I think still beat what Intel had, and Rome, 3 years old was killer, and we know Milan is even better.
My impression is that in the past the DCG contributed most to the higher GM. But with AMD's strong competition Intel currently fails to keep up. SPR even split up is an absolute huge chip that has to have a rather terrible margin relative to past products. Even the increasing ASP won't be able to make up for that. And since the DCG won't be able to improve in foreseeable time Intel's focus turned back to the CCG after all the years of Skylake refreshes, but that won't be able to rise GM as much as the DCG did in the past.
 

Markfw

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My impression is that in the past the DCG contributed most to the higher GM. But with AMD's strong competition Intel currently fails to keep up. SPR even split up is an absolute huge chip that has to have a rather terrible margin relative to past products. Even the increasing ASP won't be able to make up for that. And since the DCG won't be able to improve in foreseeable time Intel's focus turned back to the CCG after all the years of Skylake refreshes, but that won't be able to rise GM as much as the DCG did in the past.
OK< so my post was on the right track, thanks.
 

jpiniero

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My impression is that in the past the DCG contributed most to the higher GM. But with AMD's strong competition Intel currently fails to keep up. SPR even split up is an absolute huge chip that has to have a rather terrible margin relative to past products. Even the increasing ASP won't be able to make up for that. And since the DCG won't be able to improve in foreseeable time Intel's focus turned back to the CCG after all the years of Skylake refreshes, but that won't be able to rise GM as much as the DCG did in the past.
Except Sapphire is a nonfactor right now. This might have been the actual public launch of Icelake Server, hence the big gain in volume. Icelake Server is a big improvement over Cascade, so you can see why "Enterprise and Government" customers would want to wait for it, assuming they don't want/can't get AMD.
 

jpiniero

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Hm, so even today the GM essentially still majorly relies on 14 nm? If that's really the case not only Q1 22 will be low but the subsequent quarters are bound to drop even further.
Laptops are mostly Tiger Lake (but still selling tons of 14 nm) but Desktop and Server seem like they were pretty much 14 nm until last quarter to this quarter.

Also the Alder P 6+8 is substantially bigger than Tiger Lake U. I guess we will have to see how popular the 2+8 U ends up being versus OEMs just dropping the PL1 if need be.
 
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dullard

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Anyway, I am looking for more translations on these earnings. And what Alder lake may have contributed to them.
One thing to keep in mind is that Alder Lake was launched halfway (Nov 4) through Q4 (Sept 26 to Dec 25). And Q4 didn't include the rest of the Alder Lake lineup (mobile and non-K chips). It isn't possible to get a full Alder Lake financial picture from this earnings report.

I'm pretty sure Intel has repeatedly said 2022 will not be a great year for them. First they need to get to parity with the competition, before they can potentially get back to a leadership position if everything goes well. Their goal is 2025.
 
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Markfw

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One thing to keep in mind is that Alder Lake was launched halfway (Nov 4) through Q4 (Sept 26 to Dec 25). And Q4 didn't include the rest of the Alder Lake lineup (mobile and non-K chips). It isn't possible to get a full Alder Lake financial picture from this earnings report.

I'm pretty sure Intel has repeatedly said 2022 will not be a great year for them. First they need to get to parity with the competition, before they can potentially get back to a leadership position if everything goes well. Their goal is 2025.
And their CEO just said "we are in the lead and will only see headlights from AMD from now on" or something delusional like that.
 

dullard

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And their CEO just said "we are in the lead and will only see headlights from AMD from now on" or something delusional like that.
The quote: "Alder Lake. All of a sudden... Boom! We are back in the game. AMD in the rearview mirror in clients, and never again will they be in the windshield"

The unsaid portion is that he was not talking about servers.
 

Markfw

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The quote: "Alder Lake. All of a sudden... Boom! We are back in the game. AMD in the rearview mirror in clients, and never again will they be in the windshield"

The unsaid portion is that he was not talking about servers.
I said "something like that" and was right ! And nothing is unsaid with a delusional quote like he said. Your original comment about them doing something by 2025 sounds much more realistic.
 

dullard

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I said "something like that" and was right ! And nothing is unsaid with a delusional quote like he said. Your original comment about them doing something by 2025 sounds much more realistic.
While you might say that nothing is unsaid, Intel is bound by strict SEC rules. When Gelsinger said Client he meant Client. If you are an investor or potential investor, you should not take that rearview mirror comment to apply to the other Intel segments (Data Center Group, Internet of Things Group, etc.)

The 2025 was from Gelsinger too:
"On top of this commentary, Pat Gelsinger also stated that Intel’s CPU roadmaps are already baked in through 2021, 2022, and 2023. The company is thus looking to 2024/2025 for ‘unquestioned CPU leadership performance’, which traditionally means the fastest processor for single thread and multi-thread workloads."

"CEO Pat Gelsinger earlier this year stated that Intel would be returning to product leadership in 2025"
"Intel maintains that these roadmaps will showcase a clear path to process performance leadership* by 2025. *as measured by performance per watt at iso-power"
 

moinmoin

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Takes by Semianalysis:

"These horrible, 49% margins are despite Intel’s average selling prices in server, laptops, and desktops are increasing. The 10nm ramp of Alder Lake desktop, mobile, and Ice Lake server are the culprits. Intel has products that can sell at somewhat higher prices due to the current semiconductor market environment, but their manufacturing costs on 10nm are still very high. Intel claimed their 10nm manufacturing costs were down 30% year over year, but all that tells us is that the starting point was horrible. Intel is also blaming the low margins on expenses related to the start up of their Intel 4 node."

"Intel’s inventories went up significantly and Intel dodged the question when asked. They talked up the big rotation from Chromebook sales to higher end laptops, increased competitiveness (AMD share gains), the home gateway drawdown, and a major customer going vertical (Apple). None of these were satisfactory answers. We believe that their inventory is way up due to laptop ODMs not being able to secure enough other components and choosing to buy as much AMD as possible while letting Intel only supply the remaining demand."

"The real kicker is that cloud revenue has shrank year over year for 5 quarters in a row. Enterprise and communications really bailed out Intel. Intel claims they shipped more than 1 million Ice Lake server chips which is more than they shipped in the last 3 quarters combined. Despite Ice Lake server launching in the first half of the year, the actual ramp was only Q4."

 

Markfw

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Takes by Semianalysis:

"These horrible, 49% margins are despite Intel’s average selling prices in server, laptops, and desktops are increasing. The 10nm ramp of Alder Lake desktop, mobile, and Ice Lake server are the culprits. Intel has products that can sell at somewhat higher prices due to the current semiconductor market environment, but their manufacturing costs on 10nm are still very high. Intel claimed their 10nm manufacturing costs were down 30% year over year, but all that tells us is that the starting point was horrible. Intel is also blaming the low margins on expenses related to the start up of their Intel 4 node."

"Intel’s inventories went up significantly and Intel dodged the question when asked. They talked up the big rotation from Chromebook sales to higher end laptops, increased competitiveness (AMD share gains), the home gateway drawdown, and a major customer going vertical (Apple). None of these were satisfactory answers. We believe that their inventory is way up due to laptop ODMs not being able to secure enough other components and choosing to buy as much AMD as possible while letting Intel only supply the remaining demand."

"The real kicker is that cloud revenue has shrank year over year for 5 quarters in a row. Enterprise and communications really bailed out Intel. Intel claims they shipped more than 1 million Ice Lake server chips which is more than they shipped in the last 3 quarters combined. Despite Ice Lake server launching in the first half of the year, the actual ramp was only Q4."

And how does that cloud information compare to AMD ?
 

Markfw

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AMD will reports its Q4 22 earnings on Feb. 1. In general AMD should be able to further increase market share in Cloud.
What I meant, was does anybody have any VOLUME of EPYC chips that AMD may have shipped in the last quarter ? last year ?
 

Saylick

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jpiniero

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It's going to be tough to get the actual volume, unfortunately. AMD lumps their server revenue in with their semicustom so nailing down the server volume is going to be at best an educated guess. A few analysts have estimated that AMD's server market share is approaching 20% or there abouts. Make of that what you will.
AMD is going to sell everything Epyc they have, so it's just a function of how much they can supply. The "good" thing for Intel is that it appears AMD is so short Intel doesn't need to cut prices. AMD is instead jacking up their prices.
 

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