Suppliers face revenue drops due to decreasing PC demand. Intel recently adjusted its revenue forecast for the rest of the year.
PC and smartphone sales are on the decline worldwide. After a two-year boom in remote working and education, the numbers trend downwards. Contributing factors are inflation, geopolitics and supply chain issues.
Processor manufacturers such as Intel feel the effects. During the presentation of its second 2022 quarterly results, Intel said it was surprised by the rapid decline in demand from consumers and manufacturers. According to CEO Pat Gelsinger, Intel could’ve done better in its response.
Figures Q2 2022
Intel posted quarterly revenue of $15.3 billion, 22 percent down from the same period in 2021. Analysts expected quarterly sales of $18 billion. The company posted a net loss of $500 million, while net income totalled $5.1 billion in Q2 2021. Income declined by 105 percent.
The Client Computing Group (CCG), the business unit for processors for PCs, was hit hard. Revenue dropped by 25 percent to $7.7 billion in Q2 2022. The Datacenter and AI Group (DCAI) declined by 16 percent to $4.6 billion. Intel Foundry Services (IFS), which manufactures processors for third parties, saw a steep 54 percent revenue drop to $122 million.
Adjustment of annual figures
The figures impacted the chip giant’s annual forecasts. Whereas Intel previously estimated yearly revenue of $76 billion, it now predicts between $65 billion and $68 billion. Furthermore, Intel is abolishing its drone and Optane memory divisions. CEO Gelsinger remains optimistic. Intel will continue to invest $20 billion in a planned US factory in Ohio.