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Chip giant Intel lost $2.8 billion (more than 2.5 billion euros) in the first quarter. Still, the company has cause for optimism. Shareholders also see opportunities for the future, resulting in green figures on the NASDAQ.

The malaise in the PC market has been going on for a while, as we wrote earlier this year. Since the sky-high demand during the pandemic subsided, chips and other PC parts have become almost universally available again. For that reason, Intel had low expectations for the first quarter of 2023, but the numbers are not as disastrous as people had estimated.

Opportunities ahead

To summarise the numbers: Intel posted revenue of $11.7 billion (10.6 million euros) versus the expected 11.1 billion (10 billion euros). Shares were down 4 cents apiece instead of 15, yet CEO Pat Gelsinger argues that “steady progress” can be seen in the datacenter market. “While we remain cautious on the macroeconomic outlook, we are focused on what we can control as we deliver on IDM 2.0.” This term refers to one of the focal points Gelsinger brought to the table when he took office as CEO: betting big on in-house chip production. This includes billion-dollar investments in new plants, initially including plans for European factories. Intel will also be boldened by a new partnership with British chip designer Arm.

Intel expects that the low point in computer sales has been passed. Gelsinger says there is increased stability in the PC market thanks to a predicted correction in inventories. However, the networking and edge divisions are also experiencing a significant drop in demand (30 percent). All the more reason to downsize Intel’s offerings, which it has been doing for two years.

Also read: AMD chips away at Intel’s lead to reach 30% market share