The chip shortage didn’t stop Intel from having its ‘best year ever’

Tech

Intel is still feeling the burn of the chip shortage. It struggles to capitalize on the massive pandemic-driven demand for new PCs because you can’t make a laptop using only Intel chips. And yet that didn’t stop Intel from having its best financial year ever — in current Q4 2021 results, it reports its highest quarterly and highest annual revenue ever, $19.5 billion and $74.7 billion, respectively — and also four other sales records. Earnings weren’t nearly as rosy: Net income fell 21 percent in the quarter and 5 percent year-over-year to $4.6 billion and $19.9 billion, respectively.

CEO Pat Gelsinger warned of third-party chips hampering the company’s growth during Intel’s Q3 2021 earnings in October, when the company announced its Client Computing Group’s revenues had shrunk by 2 percent. Today, Intel’s Q4 earnings show things haven’t improved there: CCG is down 7 percent year over year, again due to laptops. Intel’s presentation shows that laptop revenues are down 16 percent year over year because it can’t ship as much of it as it would like, even though it probably makes more money from each laptop: The average selling price of those laptop components increased by 14 per cent .

But desktops are on the rise and the company’s other divisions have more than made up for the plunge (in terms of revenue at least), with Intel’s data center group rising 20 percent year over year to $7.3 billion. Smaller companies such as Intel’s Internet of Things Group (IOTG) and Mobileye (the self-driving car technology company) also saw increased demand, up 36 percent and 7 percent in the fourth quarter of 2021 compared to the fourth quarter of 2020. They grew this year by 33 percent and 43 percent, respectively.

In October, Gelsinger suggested that the chip shortage wouldn’t end until 2023, which sucks for Intel when you consider that the PC is experiencing a bit of a renaissance right now. 2020 marked the PC industry’s first major growth in a decade, and earlier this month Gartner and IDC reported sales were Additionally 10 to 15 percent by 2021, with more than 340 million PCs shipped and plenty of demand that IDC analysts say could have been even greater had it not been for the shortage.

But Intel isn’t automatically benefiting from all that growth, and not just from other vendors. It also has serious competition these days. The edge‘s list of the best laptops includes countless machines that don’t contain Intel chips at all, but rather Apple and AMD. We haven’t been able to say that often in the past decade! AMD is pushing even further on laptop chips this year, and Qualcomm is throwing its hat back in the ring as well. It’s a tough time for Intel to fall behind on processor technology, even if our first review of Alder Lake seems to be helping.

Intel has a number of intriguing initiatives in the works to turn its fortunes around, including tens of billions of dollars in investments in more chip-making facilities (such as the new $20 billion Ohio site, which also serves as one in the US made political game for subsidies) and its own discrete graphics processors called Intel Arc. The Intel Arc Alchemist looks like a dark horse candidate to shake up the GPU market in both desktops and laptops later this year.

To develop…

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