Question Intel Q3: Ouch

[jpiniero]

https://d1io3yog0oux5.cloudfront.net/_c675d259e2193ee11667e182e2fab5ca/intel/news/2020-10-22_Intel_Reports_Third_Quarter_2020_Financial_1424.pdf

Desktop volume down 16%, Notebook up 16% but ASP down 7%.

Q4 forecast is bad too, they are expecting 14% decline in revenue compared to Q4 last year.

 

[VirtualLarry]

Intel should put their $Billions into BTC. That might be a better option than propping up their own stock price. (Look at what Square has done.)

 

[cellarnoise]

Foundries are one part of the tip of the spear of military power anymore. As such they are just one part of a long production and geospatial tool of militaries. I expect the production chain to become even more spatially and nationally focused in next few years, regardless of the company name or "owners".

I also know a janitor that works at a large silicon company in the Hillsboro, Oregon area. Change has been happening for a few years now even down to the "help" level.

900 pound gorillas take time to change direction. I remember Intel being dead back in the highest of high AMD days. Lots of good and bad stuff happened and the gorilla came back, and then loafed around for many years, even after they were back on top.

I hope we can have some great competition for a few years as lately it has been fun to watch and be able to continue to experience the progress in price vs. performance for us little ones. Single core / multicore / storage / other. It is all fun to experience and read up on.

Though I am a bit sad that there are so many layers of understanding and software needed anymore. Writing tiny subroutines in assembly language to cut a cycle or two is like mithril anymore...

 

[ThatBuzzkiller]

Maybe the CCP can bail out their failing fabs for a reasonable price provided they also handover the RTL code for Skylake too and that the US government allows it ...

I'm pretty sure they're also going to have to sell off Altera and Mobileye to be able to keep up these next several rough years too ...

 

[mxnerd]

Intel drops on weak results for its data center group

The pandemic fueled growth in Intel's PC business, but data center spending fell off in the quarter.

www.cnbc.com

In July executives said Intel was evaluating how it might begin relying on other companies to manufacture its chips, and on Thursday CEO Bob Swan said Intel should be able to describe its decision in January.

“I would say we feel very confident in the ability of us being able to port to TSMC,” Swan said, referring to the Taiwanese manufacturer. He said Intel is “increasingly confident” that, if it were to become more reliant on TSMC, it would then be able to bring manufacturing back.

==

Does it mean that Intel probably will rely on the TSMC 5nm foundry that will be build in the USA?

 

[CHADBOGA]

Does it mean that Intel probably will rely on the TSMC 5nm foundry that will be build in the USA?

Sure sounds like it.

 

[Qwertilot]

I think we have to hope that doesn't happen entirely - the %age of stuff being pushed through TSMC is already a bit worrying.

 

[moinmoin]

“I would say we feel very confident in the ability of us being able to port to TSMC,” Swan said, referring to the Taiwanese manufacturer. He said Intel is “increasingly confident” that, if it were to become more reliant on TSMC, it would then be able to bring manufacturing back.

This is getting dangerously close to some form of burning platform memo...

 

[DrMrLordX]

I've been wondering how long Intel could continue to drive massive profits selling dated 14nm products. Perhaps now we know the answer. A few observations:

Intel is not likely to sell Altera or Mobileeye unless it can be shown that either acquisition is being grossly mis-managed. They're more likely to dump Habana Labs.

Intel may shift focus away from "general purpose" CPU production and focus on products where they dodge AMD (as well as ARM upstarts). While they sold their NAND business to SK Hynix - a move which does not bode well for in-house production of much-hyped Optane products - they can still cooperate with Hynix to drive Optane-like development in the future, perhaps as a way to compete with DRAM solutions and drive some modest licensing revenue. FPGAs have a bright future, so I expect Intel to rely more and more on Altera, perhaps to produce hybrid GPGPU/FPGA solutions (looking at you, Raja). Mobileye is their entry point to the autonomous automobile segment, where there is massive growth potential. And Atom has been a good fit for automotive in the past. No reason why it couldn't be in the future.

I've said it before, but I'll say it again: Intel may need to start handing their fabs over to TSMC or Samsung in exchange for advanced fab tech. It would also be in the strategic best interest of the country for Intel to cooperate with currently-independent TSMC (and/or Samsung) to expand their footprint in the United States so that Taiwan becomes a less-juicy target. If TSMC gains a larger presence in the US, they can better survive a major military incursion from you-know-who.

 

[moinmoin]

While they sold their NAND business to SK Hynix - a move which does not bode well for in-house production of much-hyped Optane products - they can still cooperate with Hynix to drive Optane-like development in the future, perhaps as a way to compete with DRAM solutions and drive some modest licensing revenue.

Note that while they keep everything related to Optane, the foundry for 3D XPoint was fully taken over by prior development partner Micron before, so it wasn't produced in-house since that point anymore already.

 

[krumme]

Since they buy their own stocks does that mean they believe they have somthing better than Mikes 5nm+ zen 5 in store?. I dont know what that is, but it must run some secret and cheap 5nm sauce, or those crash falling margins is going to meet their capex.
Hope they get it sorted out for compettitive prices, because it looks like AMD is on a roll and improving even their marketing !!!! lol

 

[DrMrLordX]

Note that while they keep everything related to Optane, the foundry for 3D XPoint was fully taken over by prior development partner Micron before, so it wasn't produced in-house since that point anymore already.

Ahhhh okay. So they've already farmed out production. Optane is really not affected then. Intel may wish to start licensing out Optane and opening it up a bit to try to get some traction. Tying it to their platforms may kill Optane in the long run. It's probably not going to drive enough people to their platforms so long as they continue to flounder with CPU development.

@krumme

Stock buybacks are there to protect employee stock options. Well that and to keep investors happy in the short term. They're generally not healthy for the company in the long run, unless the buyback happens during a downturn (which it almost never does).

 

[krumme]

@krumme

Stock buybacks are there to protect employee stock options. Well that and to keep investors happy in the short term. They're generally not healthy for the company in the long run, unless the buyback happens during a downturn (which it almost never does).
[/QUOTE]
yeaa exactly employee stock options. It just shows they dont know what to do.

 

[moinmoin]

Intel may wish to start licensing out Optane and opening it up a bit to try to get some traction.

I thought Micron would start selling its version of the tech independent from Intel this year, but nothing interesting to see so far. A PCIe NVMe SSD drive is all they appear to offer at this point.

 

[Gideon]

I thought Micron would start selling its version of the tech independent from Intel this year, but nothing interesting to see so far. A PCIe NVMe SSD drive is all they appear to offer at this point.

Yeah that was also what I hoped for. AFAIK it's not actually profitable to make Optane DIMMSs yet, Intel is doing it at a loss to improve Xeon sales.

 

[DrMrLordX]

Intel is doing it at a loss to improve Xeon sales.

Doesn't seem to be working.

 

[zinfamous]

I might start buying in if they drop another 25-30% over the next couple of months. AMD made me good money...I think I will use that sale to pick up some Intel, lol (after they pay for my 6900--whatever--and 5600X or 5800X)

 

[clemsyn]

I might start buying in if they drop another 25-30% over the next couple of months. AMD made me good money...I think I will use that sale to pick up some Intel, lol (after they pay for my 6900--whatever--and 5600X or 5800X)

I'm very tempted to do this as well

 

[cytg111]

The giant was knocked over once before, yet Intel really stumbled into that one too... something ridiculous long pipeline something.
Im sure they will be back, though the talent drain is a problem (i've read that here?), just rehire and do the work.
Im sensing a buck to be made off intc in the future.

 

[cytg111]

I might start buying in if they drop another 25-30% over the next couple of months. AMD made me good money...I think I will use that sale to pick up some Intel, lol (after they pay for my 6900--whatever--and 5600X or 5800X)

Ill have to read something positive around their fabbing situation first, otherwise I think its gonna be an even steeper drop from here.

 

[bigi]

meh. they have cartoons on cpu boxes now. It'll be fine

 

[TheELF]

Biased ???? Look at the entire content of the thread. Intel is in trouble. The only question is how badly. Is there any bias in that ??? Are you one of the naysayers ? Seriously"help the forum" ?? What is that supposed to mean ? I post as a user, just like the rest of you. I have opinions, and right now, that opinion is in the majority. What am I supposed to do ? Be an Intel fan to help the forums ???? NOT !!

I am a "fan" of whoever is doing better, PERIOD.....And a forum supporting Intel will do nothing for them. They need to wake up, and smell the roses, and start making some good decisions, its not my job to do that for them.

Edit: Actually, badmouthing Intel in all forums, might make them "wake up".

The best quarters intel had before ZEN were at around 3.6bil two times, was intel in trouble back then? This quarter they made 4.3bil which is still better than any quarter they had before they were "in trouble" and no, there is no bias in that, intel is still making lots of money and they do it by selling ancient technology stretching out profits for years to come.

Does anybody know anything about this:

Tax Rate

15.2%

10.8%

is this universal?! If this also applies to AMD then it's no wonder they increased prices and removed the cooler, 5% more taxes is no small matter.

They're also using their entire proceeds from selling their NAND business for stock buybacks to try and keep the stock price up.

How is owning more of your company a bad thing?
Intel paid dividends of $1.4 billion in this quarter how is keeping more of that a bad thing?

 

[Markfw]

The best quarters intel had before ZEN were at around 3.6bil two times, was intel in trouble back then? This quarter they made 4.3bil which is still better than any quarter they had before they were "in trouble" and no, there is no bias in that, intel is still making lots of money and they do it by selling ancient technology stretching out profits for years to come.

Does anybody know anything about this:

Tax Rate

15.2%

10.8%

is this universal?! If this also applies to AMD then it's no wonder they increased prices and removed the cooler, 5% more taxes is no small matter.

How is owning more of your company a bad thing?
Intel paid dividends of $1.4 billion in this quarter how is keeping more of that a bad thing?

So, you are the only one here that thinks Intel is doing fine. I won't argue that they are making money, but with their product stack, that can't go on forever. Especially when Zen 3 and Milan come out. Right now at least they have the gaming crown. That will end very soon, then what do they have ????

 

[blckgrffn]

Intel should put their $Billions into BTC. That might be a better option than propping up their own stock price. (Look at what Square has done.)

I am not laughing.

Square only committed to this in a tiny way. As companies look to keep their cash reserves diversified, it seems more likely we'll see this ".1%" type of allocation from more publicly traded companies that actually are allowed by their stakeholders to have a cash reserve.

BitcoinTreasuries.com

Track Bitcoin Treasuries of companies, miners and countries at BitcoinTreasuries.com.

bitcointreasuries.org

 

[yuri69]

So, you are the only one here that thinks Intel is doing fine. I won't argue that they are making money, but with their product stack, that can't go on forever. Especially when Zen 3 and Milan come out. Right now at least they have the gaming crown. That will end very soon, then what do they have ????

Intel is doing fine. Not great, but fine.

Intel servers are still like 8-9 out of 10 models offered by HP/Dell/Lenovo. Intel also offers hundreds of laptop models compared to tens of AMD. OEM/pre-built all-in-ones and desktops are also largely owned by Intel.

AMD dominates in DIY desktop and HEDT sales and just started to be adopted in laptops.

---

Late 2021 should bring Sapphire Rapids and Alder Lake. Both on yet another 10nm. These products have potential - advanced packaging for SPR and +20% IPC for ADL's Golden cores.

In other words, Intel will see itself on 10nm.

 

[Hitman928]

How is owning more of your company a bad thing?
Intel paid dividends of $1.4 billion in this quarter how is keeping more of that a bad thing?

Intel has already spent $14.2 billion this year on stock buy back which reduced outstanding shares by 5%. They are burning through cash to try and keep the stock price up and are now net negative in terms of liquid assets to debt (i.e. they've burned through their cash reserves to prop up their stock price and are now officially overall in debt). They are now down to $18.3 billion cash on hand with a total debt load of $36.6 billion. So, now they are selling a piece of their company in order to be able to afford another $9 billion stock buy back to try and keep their stock price up.

So, in your mind, how is that less than 5% extra ownership in a publicly traded company going to help Intel? What advantage does that give Intel that they didn't have before? What can they do with that extra ownership. Put another way, if Intel used that money to buy $1 billion from each of its top 9 shareholders, those top 9 shareholders would still hold ~$50 billion in shares, so what good did that do for Intel the company?

If you were a partner in a company, you would prefer selling off a profitable piece of the company in order to buy out a silent partner who held an insignificant part of the company all while being in debt? In what world does that make sense? This is not a positive move by Intel and only shows that they are getting more desperate to make it look like everything is fine while the building is on fire behind them. They are making a lot of short term maneuvers to try and hide their problems and hoping they can get things right before running out of ideas to keep the charade going. I'm not saying Intel is doomed, I find that highly unlikely, but it is possible that they will have to undergo a very extreme transformation from the company they are now if they can't get their technical issues worked out in the next few years.