Intel Reports 8% Drop in Q3 Revenue, Aims for Growth in Q4

Intel Corporation has announced its financial results for the third quarter of 2023, revealing an 8 percent decrease in revenue to $14.2 billion.
Intel 4th Gen Xeon Scalable ProcessorsSanta Clara, California-based Intel has outlined its plans for the fourth quarter, aiming for revenue in the range of $14.6 billion to $15.6 billion.

Pat Gelsinger, the CEO of Intel, in its earnings report, expressed the company’s commitment to its IDM 2.0 transformation strategy, stating, “We make meaningful progress on our IDM 2.0 transformation by advancing our strategy, rebuilding our execution engine, and delivering on our commitments to our customers.”

Intel’s revenue breakdown for the third quarter showed a mixed performance across its business segments. The Client Computing Group (CCG) generated $7.9 billion, representing a 3 percent decline. The Data Center and AI (DCAI) segment contributed $3.8 billion, down 10 percent.

The Network and Edge (NEX) segment reported revenue of $1.5 billion, a 32 percent decrease. On the positive side, Mobileye recorded revenue of $530 million, marking an 18 percent increase, and Intel Foundry Services (IFS) reported $311 million in revenue, showing an impressive 299 percent growth.

Intel reaffirmed its commitment to achieving five nodes in four years and regaining leadership in transistor performance and power performance by 2025. The company has begun high-volume manufacturing of Intel 4, its first node using extreme ultraviolet (EUV) technology.

Intel also achieved a significant milestone with Intel 18A, releasing the 0.9 PDK. Additionally, Intel announced plans for glass substrates to support next-generation advanced packaging, aiming to advance Moore’s Law and deliver data-centric applications.

In terms of infrastructure and manufacturing expansion, Intel opened Fab 34 in Leixlip, Ireland, during the quarter and has plans for a wafer fabrication facility in Magdeburg, Germany, and an assembly and test facility in Wrocław, Poland. This initiative aims to create a geographically balanced, secure, and resilient semiconductor manufacturing value chain in Europe.

Intel is taking steps to modernize its facilities, with plans to install the world’s first high-NA EUV tool for commercial use by the end of the year at the Gordon Moore Park in Oregon.

Additionally, Intel has submitted major manufacturing proposals in several U.S. states, representing over $100 billion in manufacturing and research investments to the U.S. Department of Commerce’s CHIPS Program Office.

The company also revealed that a major customer has committed to Intel 18A and Intel 3 with a significant pre-payment, allowing Intel to accelerate the construction of two new chip factories at its Ocotillo campus in Chandler, Arizona.

Furthermore, Intel Foundry Services (IFS) and Tower Semiconductor have entered into an agreement where Intel will provide foundry services and 300 mm manufacturing capacity to support Tower Semiconductor’s global customers.

At Intel Innovation 2023, the company outlined its strategy to bring AI everywhere, making it more accessible across all workloads, from client and edge to network and cloud. Intel showcased its AI capabilities across its hardware products and emphasized its commitment to open multi-architecture software solutions.

In the Data Center and AI segment, Intel’s 4th Gen Intel Xeon Scalable processor continued to gain traction, with the world’s top-10 cloud service providers now deploying it in general availability.

The 5th Gen Intel Xeon processor, code-named Emerald Rapids, entered production and began shipping to customers in December. Intel also highlighted its Gaudi2 accelerators and its collaboration with Stability AI to build one of the world’s largest AI supercomputers.

In the client computing segment, Intel introduced the Intel Core Ultra processors, code-named Meteor Lake, ushering in the era of the AI PC. The processors, built on Intel 4, began shipping to customers in the third quarter and were officially launched on December 14.

Additionally, Intel launched the new Intel Core 14th Generation desktop processor family, delivering high-performance frequencies and enhancing the desktop computing experience for enthusiasts.

In the network and edge segment, Intel launched the latest version of the OpenVINO toolkit, an AI inferencing and deployment runtime. Several companies, including ai.io and Fit:match, demonstrated how they use OpenVINO to accelerate their applications at Intel Innovation.

Mobileye, a subsidiary of Intel, reported record third-quarter revenue, growing by 18 percent. Mobileye also announced significant design wins for its advanced SuperVision and Chauffeur solutions with automakers FAW and Polestar.

Intel continues to adapt and innovate in the ever-evolving tech landscape, with a focus on AI, semiconductor manufacturing, and strategic investments in key regions to secure its position as a global technology leader.