Intel Corporation

Intel Corporation is an American multinational corporation and technology company.

They are a world leader in the design and manufacturing of essential products and technologies that power the cloud in an increasingly smart, connected world.

It is the world's largest semiconductor chip manufacturer by revenue and is one of the developers of the x86 series of instruction sets, the instruction sets found in most personal computers.

Employees: 131,900+

Revenue: $63.1B for FY22

HQ Location: Santa Clara, California, U.S.

Their product portfolio:

Their product portfolio provides end-to-end solutions that address the needs of an ever-evolving data-centric world.
They are continuously developing new technologies and products for a broad spectrum of markets.
Intel chips are manufactured according to Moore’s Law, delivering ever more functionality and performance, improved energy efficiency, and lower cost per transistor with each generation.
They have six wafer fabrication sites and four assembly test manufacturing locations worldwide.

Their vision and priorities:

Their strategy is to deliver the world’s best semiconductors for an increasingly data-centric world.
They have transitioned from being a PC-centric company to a data-centric one and expanded their product offerings in order to seize new market opportunities.
By focusing on these four strategic priorities they believe they will have a larger impact on their customers’ success:
- Accelerating the growth of the company
- Improving their execution
- By deploying their capital
- Evolving their culture

Financial and Business Goals for Q1 FY23

Driving to deliver $3B of cost savings in 2023, $8-10B annually exiting 2025
Managing FY23 net capital intensity ≤35% while preserving critical investments
Intel continues to make progress with its goal of achieving five nodes in four years and is on track to regain transistor performance and power performance leadership by 2025.
Intel 7 is now in high-volume manufacturing for both client and server.
Intel 4 is manufacturing-ready, with the Meteor Lake ramp expected in the second half of 2023.
Intel 3 continues to progress and is on track.
On Intel 20A and Intel 18A, Intel’s first internal test chips, and those of a major potential foundry customer, have taped out with products undergoing fabrication.

Outlook for 2023

Managing the business through significant industry-wide volatility and persistent economic headwinds expected through at least the first half of 2023

Things to know right now

Customer and Partner wins with:
- Acer and HP launched Intel Unison on select Intel® Evo™-verified laptops
- Amazon Web Services previewed EC2 R7iz instances, powered by 4th Gen Intel Xeon Scalable processors
- U.S. Defense Advanced Research Projects Agency (DARPA) selected Intel for Phase 1 of the Space-BACN program to accelerate inter-satellite communications
- IFS added a leading cloud, edge and data center solutions provider as a customer to Intel 3
They achieved the following milestones:
- Launched 4th Gen Intel® Xeon® Scalable processors (formerly code-named Sapphire Rapids)
- Introduced Intel® Xeon® CPU Max Series (formerly code-named Sapphire Rapids HBM) and Intel® Data Center GPU Max Series (formerly code-named Ponte Vecchio)
- Announced the world’s fastest desktop and mobile processors with the new 13th Gen Intel® Core™ i9-13900KS1 and the new flagship Intel Core i9-13980HX2
- Ramped more than 60 design wins since the introduction of Intel® Unison™
- Powered on Emerald Rapids with top OEM and CSP customers on CentOS and Windows Server 2019; sampling and remains on track to launch in 2H 2023
- Shipped Intel® Data Center GPU Flex Series to multiple key customers around the world, enabling large-scale cloud gaming and media delivery deployments
Strategic achievements:
- Achieved in partnership with ASUS a new world record for overclocking, pushing the 13th Gen Intel Core i9-13900K to 9.008 GHz
- Generated 13.5 nm wavelength light with the first high-volume EUV scanner in Europe, a key milestone toward high-volume production of Intel 4
- Announced the evolution of AXG’s structure to accelerate and scale its impact
- Signed purchase agreement to become a landowner in Magdeburg, Germany, and signed Bechtel as general contractor for Intel’s new Ohio site
- Elected Lip-Bu Tan and Barbara Novick to Intel’s board of directors, and appointed Frank Yeary as independent chair

Business Segments:

They have transformed beyond a PC-centric company to have a stronger focus on data, allowing them to address the needs of a new data-centric world. Their main businesses include:

Data-centric Businesses

Market opportunities in their data-centric businesses include Server and Storage, including CPUs, chipsets, accelerators, memory, and storage media in servers and storage systems; Networking and Connectivity, including CPUs, chipsets, accelerators, memory and storage media, and connectivity devices in network appliances and network function virtualization (NFV) systems; Internet of Things, including addressable logic application-specific integrated circuits and standard products, microprocessors, microcontrollers, digital signal processors, memory and storage media and modems in industrial, transportation, automated driving, retail, video surveillance, healthcare, public sector, office automation, gaming, and smart home.

Their operating segments include:

Data Center Group (DCG)
Internet of Things (IOTG)
Mobileye
Non-volatile Memory Solutions Group (NSG)
Programmable Solutions Group (PSG)

PC-centric Business

Market opportunities in their PC-centric business include client CPUs and chipsets, connectivity devices (including modems in PC and sub-5G smartphones), discrete graphics, memory, and storage media in client, phone, and USB/cards.

Their operating segment includes:

Client Computing Group (CCG)

Operating Segments

Their segment reporting aligns with their organizational structure and business strategy. They report results under six business units:

Client Computing Group (CCG)
CCG creates platforms designed for end-user form factors, focusing on higher growth segments of 2-in-1, thin-and-light, commercial, and gaming, and growth opportunities in areas such as connectivity.
Datacenter and AI Group (DCAI)
DCAI focuses on developing leadership data center products, including Intel® Xeon® server and field programmable gate array (FPGA) products, as well as driving the company’s overall artificial intelligence (AI) strategy.
Network and Edge Group (NEX)
NEX is chartered with driving technology and product leadership throughout the network to the intelligent edge

Accelerated Computing Systems and Graphics Group (AXG)
AXG is chartered with delivering high-performance computing and graphics solutions across clients, enterprises, and data centers.
Intel Foundry Services (IFS)
IFS is a fully vertical, standalone foundry business that offers a wide range of manufacturing services to meet unique product needs, including its industry-leading sort and test capabilities.
Mobileye (MBLY)
Mobileye is a global leader in driving assistance and self-driving solutions. Our product portfolio covers the entire stack required for assisted and autonomous driving.

Competitors

Nokia
Cisco
Samsung
Sony

Their financial calendar

Q1: January-March - Around 2nd April 2023

Q2: April-June - Around 2nd July 2023

Q3: July-September - Around 1st October 2023

Q4: October-December - Around 31st December 2023

Next Earnings Report:

Around 2nd April 2023

Positives from the last earnings report Q4FY22:

Highlights:
- CCG’s 13th Gen Intel® Core™ desktop processor family became available, starting with desktop “K” processors and the Intel® Z790 chipset.
- DCAI launched its 4th Gen Intel® Xeon® Scalable processors (formerly code-named Sapphire Rapids) with the support of customers and partners such as Dell Technologies, Google Cloud, Hewlett Packard Enterprise, Lenovo, Microsoft Azure, NVIDIA and many others, and is ramping production to meet a strong backlog of demand.
- NEX achieved a second consecutive year of double-digit revenue growth, hitting key product milestones with Intel® IPU E2000 (Mount Evans), Raptor Lake P&S, Alder Lake N and Sapphire Rapids.
- AXG delivered record revenue the fourth quarter . In January 2023, AXG launched the Intel® Xeon® CPU Max Series (formerly code-named Sapphire Rapids HBM) and the Intel® Data Center GPU Max Series (formerly code-named Ponte Vecchio).
- IFS achieved record revenue for both the fourth quarter and full year, with active design engagements with seven of the 10 largest foundry customers. It also added a leading cloud, edge and data center solutions provider as a customer to Intel 3.
- Mobileye’s revenue up 59% year-over-year on EyeQ and SuperVision ramp. Operating income up 71% year on year on revenue flow through. Mobileye continued to execute well in its core advanced driver-assistance systems (ADAS) business, as it launched systems into 233 distinct vehicle models in 2022.

Challenges from the last earnings report Q4FY22:

Revenue down 28% year on year
Gross Margin down 43.8% year-on-year
EPS down 92% year-on-year
Per Operating Segment:
- Client Computing Group (CCG)
  - Lower revenue on PC demand softening primarily in consumer and education, and customer inventory reductions
  - Lower operating income on lower revenue, increased Intel 7 mix, higher inventory reserves, and investment in product and process roadmap
- Network and Edge Group (NEX)
  - Slightly lower revenue driven by TAM weakness, offset by the ramp of IPU products
  - Lower operating income on increased investment in process and product roadmap and segment mix