Intel has indicated a dip in demand for their chips following a disappointing expected sales and profit report for the second quarter.
According to information compiled by Bloomberg, analysts on average estimated profits of 82 cents a share and a total of US18.5 billion in sales. However, Intel estimates a significantly lower 70 cents per share and $18 billion in sales, with gross margin sitting at 51%.
The first quarter saw a drop in demand for PC chips, as a declining number of people look to buy devices for home, with pandemic restrictions easing internationally.
Intel CEO Pat Gelsinger was appointed only recently, in the hope that he could turn the company around and return it to rapid revenue gains. He plans to invest in manufacturing plants and infrastructure, costing a total of US$27 billion.
With a new range of products being launched, such as their 13th Gen Raptor Lake processors which are expected for release later this year, the company expects profits to increase again in the third and fourth quarters of the year.
Intel is continuing to stick to full year forecasts that allude to accelerated growth in the second half of the year.
“We have a tremendous growth story over the next several years,” says Gelsinger.
“We remain intensely focused on rebuilding our execution machine.”
COVID related lockdowns in China are once again affecting the supply chain for chips, resulting in slower production for Intel, and thus hurting their sales and earnings projections.
