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Intel Posts A Profit At Last But Admits ‘Persistent Weakness’

Intel is back in the black after two quarters of record losses but admits ongoing “weakness” in its product segments.

The chipset and device maker recorded revenue of AU$19.25 billion, making a AU$2.2 billion profit which analysts say is mostly due to a resurgence in the PC market with expectations of increased orders by business and enterprise. Intel also has slashed costs.

Intel’s share price surged on Wall Street as a result.

Nevertheless the company sees persistent problems ahead in the near future. Longer term, it has invested in artificial intelligence chipset solutions.

CNBC reports that Intel CEO Pat Gelsinger acknowledged “persistent weakness” in all segments of its business through to the end of 2023.

“Server chip sales won’t recover until the fourth quarter, CNBC reports Gelsinger saying.

“He also said that cloud companies were focusing more on securing graphics processors for artificial intelligence instead of Intel’s central processors,” it reports.

Revenue in Intel’s client computing group, server chip division, and network and edge division all dropped by double digit percentages year-on-year.

Intel has been struggling of recent years. In 2020, it lost its lucrative business supplying processors to Apple for its Mac desktops and laptops. Apple instead built its own processors based on ARM architecture.

In reply the company has slashed nine lines of its business to cut costs, Intel’s chief financial officer told The Wall Street Journal. The business slashed AU$4.5 billion in this year alone and had announced plans to cut AU$14.9 billion each year until 2025, the journal reports.

The company also is investing heavily in AI. At its earnings briefing, Mr Gelsinger said Intel was building AI into all its products and later this year would ship Meteor Lake, its first consumer chip with a built-in neural processor for machine learning tasks, The Verge reports.

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