Intel sales plummet in 2022, does not expect any recovery in Q1

Intel has reported revenue of $63.1 billion with gross margin of 47.3 percent in 2022 against forecasted revenue of $76 billion.
Intel technology for 5G
“We lost share, we lost momentum. We think that stabilizes this year,” Intel CEO Pat Gelsinger told investors on a conference call. He said Intel has been losing market share in the data center market, a nod at the strength of rival Advanced Micro Devices (AMD).

Intel’s fourth-quarter revenue fell 32 percent to $14 billion. Intel is targeting $10.5-11.5 billion in the first quarter of 2023.

“In the fourth quarter, we took steps to right-size the organization and rationalize our investments, prioritizing the areas where we can deliver the highest value for the long term,” Intel CFO David Zinsner said in its earnings report.

“These actions underpin our cost-reduction targets of $3 billion in 2023, and set the stage to achieve $8 billion to $10 billion by the end of 2025.”

The data center market has also slowed from double-digit growth as businesses cut costs to ride out an economic slowdown.

PC shipments fell 16.5 percent to 292.3 million units in 2022, according to data from research firm IDC, forcing chipmakers to cut back production and slash revenue forecasts.

Intel has focused on regaining the lead in chipmaking technology. Outsourcing the chipmaking process has helped rivals like AMD make much smaller and faster chips and outpace Intel’s technology.

Business Unit Revenue 

Client Computing Group (CCG) $6.6 bn (–36%) in Q4 2022 and $31.7 bn (–23%) in 2022

Data Center and AI (DCAI) $4.3 billion (–33%) in Q4 2022 and $19.2 billion (–15%) in 2022

Network and Edge (NEX) $2.1 billion (–1%)in Q4 2022 and $8.9 billion (+11%) in 2022

Mobileye $565 million (+59%) in Q4 2022 and $1.9 billion (+35%) in 2022

Accelerated Computing Systems and Graphics (AXG) $247 mn (+1%) in Q4 2022 and $837 mn (+8%) in 2022

Intel Foundry Services (IFS) $319 mn (+30%) in Q4 2022 and $895 mn (+14%) in 2022

Intel in Q4

PSG (Programmable Solutions Group)

Intel’s CCG (Client Computing Group) revenue fell 36 percent to $6.6 billion as PC TAM deteriorated faster due to economic headwinds. CCG realized record CPU ASPs, up 11 percent, driven by leadership performance and attractive features of Evo and vPro platforms.

Intel’s DCAI (Data Center and AI Group) revenue fell 33 percent to $4.3 billion, driven by TAM contraction and competitive pressure.

Intel’s NEX (Network and Edge Group) revenue dropped 1 percent to $2.1 billion as declining GDP impacted the edge business, offsetting growth in Xeon network CPUs and the ramp of Mount Evans infrastructure processing unit.

Intel’s AXG (Accelerated Computing Systems and Graphics) business has achieved record quarterly revenue of $247 million (+1 percent) supported by the launch of Sapphire Rapids HBM.

Intel’s Mobileye revenue rose 59 percent to $565 million. Full-year revenue for Mobileye was $1.9 billion, growing 35 percent.

Intel’s IFS (Intel Foundry Services) revenue rose 30 percent to $319 million on increased automotive shipments.

Intel will end future investment on its network switching product line, while still supporting existing products and customers.

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