At the close of the US stock market on January 25th, Intel announced its Q4 2023 results, with revenue increasing by 10% year-on-year to $15.4 billion; Under non GAAP accounting standards, the net profit attributable to shareholders increased from a loss of $700 million in the same period last year to a profit of $2.7 billion.
Intel CEO Pat Gelsinger said that Intel's two core businesses, personal computers and servers, are experiencing seasonal sluggish demand, and non core businesses such as its autonomous driving and automotive chip company Mobileye are also facing difficulties.
For a long time, the market has been skeptical about whether Intel can emerge from the quagmire. In terms of stock price, Intel's stock price has remained almost unchanged in the past five years, outperforming the market as a whole compared to the 272% increase in the Philadelphia Semiconductor Index during the same period.
There are several reasons: firstly, the growth of the personal computer market is sluggish, and it has been trapped in a high inventory crisis in the past year. Currently, Intel hopes to bet on AI PC opportunities; In the data center server market, customers are enthusiastic about AI chips, but Intel is not the main player, and orders mainly flow to NVIDIA. Intel's Gaudi chip, on the other hand, is often seen by customers as a substitute for Nvidia AI acceleration chips.
In addition, the massive investment has led to Intel's gross profit margin dropping from its previous high of over 60% to only around 35% in early 2023. However, the situation has gradually improved, and the financial report shows that Intel's gross profit margin in the fourth quarter of last year was 48.8%. However, this data is still less than TSMC's 54.4% for the same period, indicating that Intel's significant investment in the chip manufacturing sector has dragged down gross profit margins.
Intel is continuously reducing costs through layoffs, layoffs, and spin offs of certain businesses.
Intel CFO David Zinner stated that he has reduced costs by $3 billion last year and is looking for ways to further control costs. He expects to further improve efficiency by 2024. In addition, Intel will release financial data for its chip manufacturing division separately starting from the first quarter of this year, allowing the outside world to glimpse how Intel's division is burning money.
Intel provided guidance on revenue of $12.7 billion and earnings per share for the first quarter of this year in its financial report, while the market expected revenue of $14.2 billion and earnings per share of $0.34. As of press release, Intel fell 10.39% after trading.
Intel did not propose a full year financial forecast. Kissinger stated that the company has orders worth $2 billion for AI chips and expects sales to improve in the second half of this year.