Chipmaker Intel posts biggest quarterly loss but offers hope rebound is under way
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Investors had been sceptical that Intel can catch up with rivals, and its stock plunged nearly 50 per cent last year.
PHOTO: REUTERS
San Francisco – Intel on Thursday posted a massive fall in sales for the first quarter of 2023 because of a steep drop in the demand for semiconductors, or chips, that power personal computers and smartphones.
Its revenue fell 36 per cent to US$11.7 billion (S$15.6 billion) in the three-month period and the biggest United States chipmaker posted a loss of US$2.8 billion, its biggest ever for a quarter.
Rising prices, a global chip glut and poor demand for hardware also punished Intel’s rival Samsung, which earlier on Thursday reported its worst quarterly profit in 14 years.
But Intel gave a solid forecast for the current period, indicating that the company may finally be poised to bounce back from a historic slump.
Second-quarter sales would be US$11.5 billion to US$12.5 billion, it said. The midpoint of that range would exceed the average analyst estimate of US$11.7 billion.
Intel shares rose 3.8 per cent in after-market trading following the announcement.
The outlook is a long-awaited bright spot for the battered chip pioneer. A massive pile-up of inventory, weak demand and the loss of market share have put Intel in a historic hole, forcing it to plough billions of dollars into new production technology.
Investors had been sceptical that the chipmaker can catch up with rivals, and the stock plunged nearly 50 per cent last year. Although the shares have begun to recover in 2023, chief executive officer Pat Gelsinger still needs to offer concrete evidence that Intel’s finances are improving.
Mr Gelsinger, who took the top job in 2021, has laid out a plan to build new factories and develop new production techniques at record pace – making that the keystone of his push to make Intel the industry’s leader again. But the company faces a steep drop in demand for personal computers, and it is struggling in data centre processors, where it once had the technological edge.
Intel is among the world’s leading semiconductor makers that produce a wide range of products, including the latest generation chips, along with Taiwan Semiconductor Manufacturing Company and South Korea’s Samsung.
It is struggling to compete with Nvidia for the semiconductors that undergird ChatGPT-style generative artificial intelligence, a major new and chip-hungry sector for the industry.
The chips industry, which also powers technology in cars, is well-known for its volatility, with demand and supply see-sawing with the dips and rises in the world economy. AFP, BLOOMBERG
