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.
It's all about growth.
Intel is doing well financially but the future is what worries investors. A lot of Intel's business is manufacturing which will require a lot of capex to keep at a leading node. If they send out orders to other fabs, maintaining that cash flow for capex will be difficult when the designs themselves might not be much better than the competition. Intel's main advantage over the years has been their leading nodes.
Stock buybacks are good for investors now but not in the future. It means they have cash but they don't have a plan to use that cash to grow the company. Why aren't they investing more into manufacturing to take the lead from TSMC?
Markfw
Moderator Emeritus, Elite Member
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The fact that x number of models are offered has NOTHING to do with how good those models perform, or the sales trends. Did you see the recent decisions on what hardware to use in the new supercomputers ? EPYC. Have you seen the benchmarks and prices of the current models, EPYC vs Xeon ? In every category, EPYC wins, and Milan is coming soon. How long do you think Intel can deceive its customers on what good their hardware is compared to the competition ? Being in denial is not good.
moinmoin
Diamond Member
- Jun 1, 2017
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Intel will always be the king of quantity, that quantity is in no real danger anytime soon unless both AMD and TSMC expand tremendously and quickly (likely not worth the cost). So Intel will survive on that alone.
But the way things go right now Intel will soon be unable to offer competitive bleeding edge product of its own. At that point ASP and margins will fall and all that Intel ends up offering is commodity products across the whole product range the way its Atom lineup has been seen up to now. Even that is not really a problem per se, but clashed completely with the public image Intel still tries to push.
It's cliché time. Betamax, DEC Alpha, or BeOS were advanced tech, but didn't break into the market. The competition was technologically inferior but managed to prevail.
Like I said, Intel still have a roadmap of potentially very solid products. Both unreleased Cove architectures are reportedly aiming at 20% IPC gains. Intel will likely do the same thing as AMD did with GF's failed 7nm and migrate bleeding edge to TSMC. So ASP should be covered.
SPR should finally replace those 14nm abominations. So the server market is happy - new shiny products and nice powerpoint graphs. The show goes on.
About the bleeding edge... Sure, Intel 10nm has been an utter disaster. So no bleeding edge. However, is there really no way they will fix that in late 2021? Is there no way SPR competing with Milan due to a better interconnect and/or packaging tech? Is there no way Alder Lake's power management actually doing the job in the laptop field?
Like I said, Intel still have a roadmap of potentially very solid products. Both unreleased Cove architectures are reportedly aiming at 20% IPC gains. Intel will likely do the same thing as AMD did with GF's failed 7nm and migrate bleeding edge to TSMC. So ASP should be covered.
SPR should finally replace those 14nm abominations. So the server market is happy - new shiny products and nice powerpoint graphs. The show goes on.
About the bleeding edge... Sure, Intel 10nm has been an utter disaster. So no bleeding edge. However, is there really no way they will fix that in late 2021? Is there no way SPR competing with Milan due to a better interconnect and/or packaging tech? Is there no way Alder Lake's power management actually doing the job in the laptop field?
blckgrffn
Diamond Member
The thing I find questionable about that is didn't Intel minimize their 10nm buildout to focus on 7nm? Given their role as the mass production x86 CPU provider that doesn't seem to align well with the next 2-3 years. Just how many Intel 10nm CPUs can they create?
And how much capacity does TSMC really have on their leading edge nodes? With Apple and AMD moving onto 5nm and likely buying about as much silicon as they can, there might be a lot of space left in the 7nm/6nm that would likely be better than 14+++++ mass capacity that Intel has.
While using TSMC is certainly going to be a much needed pressure release valve on what I am sure are very unfun meetings at Intel HQ, it's one of those situations where they are going to be funding what has to be seen as their primary long term competitor. That's always a chancy strategic move.
moinmoin
Diamond Member
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If all went as planned by its own roadmaps Intel would have had (fully working) 14nm back in 2013, 10nm in 2015, 7nm in 2017, 5nm in 2019. We now are at the end of 2020 and 10nm still seems to go far from smoothly (where is Ice Lake-SP?). What roadmaps do actually look realistically good?
They wouldn't be able to rely on it for much. I don't recall the figures off the top of my head but I did the math when it was announced (since people were claiming Apple's SoCs would start getting made in the USA) and if that fab was 100% dedicated to making iPhone SoCs (not even iPad etc. just iPhones) and had 100% yields, it could only serve about 75% of Apple's yearly demand. It will be nowhere near the size of TSMC's fabs in Taiwan.
It is also not built yet, and by the time it is TSMC's leading edge will be N3P or possibly even N2. It will basically be an N+2 fab by the time it reaches full production. This fab isn't intended to serve US customers who want leading edge capacity like Apple, or Intel (to the extent they might start using TSMC for leading edge products)
My bet was and still is that it will end up serving a lot of defense contractors, who need a US based fab for security reasons. I haven't heard anything about this fab being able to handle classified stuff, but being based in the US, and owned by a friendly country, all they really need is a controlled access line that's separate from the rest (both hardware & software) where you need to be a cleared US citizen to work.
These are very interesting questions. Intel needs to selectively aim a few high_margin/low_volume product lines to be outsourced to TSMC. As for winning the capacity, I guess they will simply pay more than the others aka "financial horsepower".
Ice Lake-SP is another victim of the 10nm disaster. It was planned as a 2019 (maybe earlier) product - considering its core count and features. Now it seems possible they won't even bother with the highest core count dies.
Like tried to convey, H2 2021 might be different. I just want to avoid Conroe surprises.
My biggest surprise is how long this Intel stock correction took. The markets price stock on it's future perceived value 6 to 12 months down the road generally.
Intel has been pretty much been sitting still with their 14nm technology for a few years. So long that AMD has had time to roll out 3 new real releases in the meantime. One doesn't have to be too smart to see that this is going to be a problem down the road.
I expect it has further to fall and I now understand one piece of the puzzle that they have been propping up their own stock price; but this is just borrowed time in the long run (giving the execs an opportunity to unload some of their options).
Found this site and seems to be a lot more selling by Intel insiders than buying.......
Intel has been pretty much been sitting still with their 14nm technology for a few years. So long that AMD has had time to roll out 3 new real releases in the meantime. One doesn't have to be too smart to see that this is going to be a problem down the road.
I expect it has further to fall and I now understand one piece of the puzzle that they have been propping up their own stock price; but this is just borrowed time in the long run (giving the execs an opportunity to unload some of their options).
Found this site and seems to be a lot more selling by Intel insiders than buying.......
Not exactly. The proportion of stock as part of an Intel employee's compensation, for the engineer doing real work, is the lowest in this industry, by a long way. Propping up the stock price barely makes a difference to them.
But it sure helps out the VP's and c-suite dwellers.
blckgrffn
Diamond Member
Exactly what I read into that too. It is a near leading edge facility but really built for those who want to chase US Defense contracts that can't/don't want to deal with the risk of sourcing components internationally. The capacity reflects this as it is a fraction of the size of their full volume fab facilities elsewhere.
TSMC’s Announcement Of A New U.S. Semiconductor Fab Is Big News
The announcement by Taiwan Semiconductor Manufacturing Company (TSMC) of the intention to build a “fab” in Arizona is big news, although it is really just a toe in the water.
www.forbes.com
5 nm, 20,000 wafers per month. Some of their other fabs can process 150,000 wafers per month. A $12BN niche fab for customers with very specific requirements.
Haha, with help from the state of Arizona and US Federal Government. Let's hope it goes better than the Foxconn "investment" in Wisconsin.
Markfw
Moderator Emeritus, Elite Member
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Nothing personal, but I am really sick of hearing "Intel has this on their roadmap" and "in xxx timeframe they will have yyy product".
The only thing I have seen as new is a limited quantity of Rocket lake laptop chips that have mixed reviews. They are losing badly in server, HEDT, and in 2 weeks, desktop. And their laptops are fighting with the new Renior chips.
As for your cliches, Betamax was not the same as VHS, DEC Alpha was a different technology. x86-cpus's by AMD and Intel are direct competitors for the exact same market.
Here is a comparison... Back in the 50's and 60's American cars ruled (at least in America) Then in the 70's and 80's the Japanese imports came along. The car industry has never been the same. Even to this day, they fight to stay alive. They are doing OK< but the import world has gone from a small percentage to the majority of cars (or at least a large percentage) in the US. I see a strong possibility of AMD doing something like this. It may take them 10 years, like the US automakers took to come back.
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moonbogg
Lifer
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This is what Intel gets for making me choose between 6 slower cores for $700 and 4 faster ones for $500. They can suck it.
Mark, this is a thread about the financial results.
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.
"Intel beat estimates overall as work from home continued because of the coronavirus pandemic. "
Can you please show us data where Intel is "losing badly" in Server, HEDT and in desktops and fight with AMD on the laptop front? Please show the overall percentages and Profit After Tax for both Intel and AMD, that backs up your statement.
I know someone mentioned BIAS, but you are making comments in a thread regarding financial results and the comments you are making are not in line with the actual data.
Please feel free to correct me if I'm wrong.
Benchmarks do not always equate to revenue and sales.
Ramping up Tiger Lake is killing the margins. Having to cut Server prices because of AMD is killing the margins. They can't sell 14 nm forever.
Oh, I'm well aware, but did they lose money? Did they beat the estimates? There are multiple things killing the margins, but they are still doing better than what WS expected. Plus, they aren't losing in the markets that some people like to claim.
Losing money, no, but the operating income was down 22% compared to Q3 last year. ($5B versus $6.4B)
Markfw
Moderator Emeritus, Elite Member
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My comments speak to their ability to continue to make money, so it is on-topic. And if you can't see the performance numbers from reading on the forums, and the internet, well, I pity you. I don't need to provide proof. You are ignoring the "negative equity" due to stock buybacks ? You are willing to ignore them losing market share becuase of inferior products ? All of these affect their continued ability to make money. It can't continue forever, you don't see that ? You don't think thats a bad thing ?Mark, this is a thread about the financial results.
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
"Intel beat estimates overall as work from home continued because of the coronavirus pandemic. "
Can you please show us data where Intel is "losing badly" in Server, HEDT and in desktops and fight with AMD on the laptop front? Please show the overall percentages and Profit After Tax for both Intel and AMD, that backs up your statement.
I know someone mentioned BIAS, but you are making comments in a thread regarding financial results and the comments you are making are not in line with the actual data.
Please feel free to correct me if I'm wrong.
Benchmarks do not always equate to revenue and sales.
From your own link :
"Intel shares fell as much as 10% in extended trading on Thursday after the company reported fiscal third-quarter earnings that were stronger than analysts had expected but showed new weakness in its data center business. "
You don't think EPYC had something to do with that ? Its all related. 10% stock drop is not small.
Edit: One more quote from your linked article
"
Excluding the after-hours move, Intel share are down about 10% since the beginning of 2020, while the S&P 500 is up 7%.
Shares of competing chipmaker AMD rose as much as 2% in extended trading after the announcement.
"
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Vattila
Senior member
- Oct 22, 2004
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In their outlook, Intel expects to take back share in the notebook market with "Tiger Lake" this quarter.
Meanwhile, AMD has had great success and growing momentum with Ryzen Mobile 4000 ("Renoir").
It will be interesting to see how this fight pans out. I guess both chips will do well, with the older chips being the losers.
Meanwhile, AMD has had great success and growing momentum with Ryzen Mobile 4000 ("Renoir").
It will be interesting to see how this fight pans out. I guess both chips will do well, with the older chips being the losers.
Do you think the slow down in business/server sales, due to COVID, could not also have something to do with that?
Are you attributing the weakness to EPYC? Or is it ARM (Amazon and others)? What is EPYC market share from 2019 to 2020? Again, you provide no relevant DATA, you just make claims and move on.
Well, yes, I see it as a bad thing, but I also realize that Intel can outlast a few years and come back strong. They have a war chest of money, they aren't losing money. People need to see this with their eyes wide open. GM took a bailout and was close to bankruptcy (not nearly as dramatic as this, but they've bounced back and are now have the second largest selling vehicle.
Again, a year ago I saw people saying Intel was dead! lol.
I've worked for a couple of Fortune 50 companies. People selling off shares even after beating estimates, is not a new trend. People have an estimate of companies beating their WS predictions. They expect them to be in trend with previous years. So even if a company is doing better than WS expects, they have customers who will sell off because iit isn't the same percentage as past years. This happens way more frequently than you can imagine. I've worked for several Fortune 50 companies. Even doing well in the bad times, it has a tendency to bring the stock down. You just never want a stock downgrade.
I know it's easy to jump on the people selling off stock, but that's where you can make the real money is knowing a long term company will bounce back.
It's not due to inferior products, it's due to the market. It's a huge gambling game and you cannot use it for a real idea of what the company is capable of or doing.
Hell, Tesla was at $200 for YEARSSSSSSS. You know what it's worth now? Even after the battery announcement and a lot of people selling off because they knew the stock would drop?
But please, show me some data about how well AMD has taken over those markets you mentioned. If you can't, that's fine. I'd be really interested to see the market share numbers. Not someone rambling with no knowledge of the market and financials.
I'll reply to this as an example. You haven't provided any data to support your claims that AMD is winning those market segments as you suggest. Those are benchmarks, not actually sales figure.
Japanese Cars are a hit. I'll be the first to admit I own two high performance Japanese sports cars/sedans. For the US market, the top three vehicles sold in 2019 are:
1. Ford F-159
2. Dodge Ram
3. Chevolet Silverado.
4 of the top 8 were US built cars. To put that in to perspective, the Toyota Camery sold 336k (the Chevrolet Equinox sold more!!). The F-150 sold 896K!
You seem to hone in on high performance desktops and gaming. You might want to actually look at their overall portfolio of products and the actual numbers.
Plus, let's not wax intellectual about the difference between trucks and "cars". Because the #3-4 are Japanese SUVS. Not cars.
Back on topic, color me surprised that Intel beat the WS estimates and they are doing fairly well. Sure, it will take them a few years, but they run their own plants. They certainly need a good comeback.
Markfw
Moderator Emeritus, Elite Member
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You know, there are stats from Euope showing the sellers and quantities, AMD way ahead. There are stats on the top selling CPUs at =Amazon, AMD way ahead.. The stock for Intel has dropped from a high of about 70 this year to 48. AMD has gone up from about 50 to 82 over the same period.
But no matter what I post, and what I link to, your mind is made up, so think what you want.
Well, you could have bought AMD. Nobody put a gun to your head and forced you to buy intel.
AMD's Q4 2019 market share was 15.5% in x86. Q2 2020 was 18.3%. AMD is slowly taking market share. The past CEO of Intel said they must not let AMD surpass 20% market share (although I think this was only datacenter). Given the trend, that will happen.
Furthermore, Intel's margins have dropped from Q3 2019 to Q3 2020 from 58.9% to 53.1%. In a market that is relatively supply constrained, it makes no sense to charge an amount that will lower your margins unless the competition is forcing the change. Intel is lowering prices so customers don't move to AMD's platform.
We will have numbers next week when AMD releases their earnings. AMD is currently supply constrained and said they can sell enough to hit guidance. So for this quarter, I don't think AMD had the impact it could have if it had the capacity. Q4 guidance at AMD vs Intel will show us if AMD has pushed into Intel's market share. Customers waiting on AMD's platform may have moved orders to Q4 to wait for the capacity.
Intel sales are great because they currently own the market. Because of that, the only way a lot of platforms and companies could quickly upgrade to hit Covid demand was buying another Intel CPU that was faster than the current one. They don't have time to switch to a new platform.
The damage done to Intel will not show until enough businesses decide to invest in AMD's platform after their Intel platforms hit end of life (and AMD can supply them). Yes, Intel won't be in a lot of trouble unless they stay uncompetitive past 2023. We will have to see what happens.
AMD is winning in all markets. That doesn't mean they will become the majority supplier overnight, but winning means they are actively taking share from the market leader every quarter. If you look at the below charts, obviously Intel is still in a very strong position market share wise, but AMD has been able to more than double their total x86 market share in the 3 years since Zen1 launched, and Zen1/Zen+ weren't even particularly strong products across all segments. AMD has even said that for Epyc, they didn't even try to go after certain server markets (e.g. HPC) until Zen2 and even then they don't expect a total market solution until Zen3. With Zen3, AMD will most likely be able to claim performance and performance/watt leadership across almost all segments, so the real question is, what is to stop AMD from again doubling their market share over the next 3 years? That's the big concern for Intel, not where they stand today.
AMD has been able to do this while also doubling their gross margins which means that they aren't just taking market share, a lot of what they are taking isn't the low margin value markets, it's mid-range and above. Intel is having to cut their own gross margins to try and prevent AMD from taking even more.
I said last quarterly earnings report, Intel can survive 10 nm being a bad node, they'll take some bumps, but they'll survive. If 7 nm is also a bad node or just comes really late, Intel most likely won't be the Intel we know anymore. Their operating model is not designed to share 50% of the market. They are burning through their cash reserves to keep up appearances, but if they can't get to 7 nm successfully, they will have to make some major changes in how they operate and really the type of company they are.
AMD gross margin from March 2017 to June 2020
Intel gross margin since March 2017 to June 2020
Intel also just announced 53.1% GM for 3Q2020 so a further decrease from shown in the graph and the lowest it's been in over a decade.
AMD has been able to do this while also doubling their gross margins which means that they aren't just taking market share, a lot of what they are taking isn't the low margin value markets, it's mid-range and above. Intel is having to cut their own gross margins to try and prevent AMD from taking even more.
I said last quarterly earnings report, Intel can survive 10 nm being a bad node, they'll take some bumps, but they'll survive. If 7 nm is also a bad node or just comes really late, Intel most likely won't be the Intel we know anymore. Their operating model is not designed to share 50% of the market. They are burning through their cash reserves to keep up appearances, but if they can't get to 7 nm successfully, they will have to make some major changes in how they operate and really the type of company they are.
AMD gross margin from March 2017 to June 2020
Intel gross margin since March 2017 to June 2020
Intel also just announced 53.1% GM for 3Q2020 so a further decrease from shown in the graph and the lowest it's been in over a decade.
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