Data center business fell 20% year-on-year, Intel expects “core shortage” will continue for two years

In the early morning of April 23, the semiconductor giant Intel announced the first quarter of 2021 financial report. Although the overall performance exceeded market expectations, the revenue of the data center business, which is regarded as the growth locomotive, fell 20% year-on-year. As of press time, Intel fell 2.17% after the market.
According to Intel’s disclosure, revenue in the first fiscal quarter was US$19.7 billion, a decrease of 1% compared to US$19.8 billion in the same period last year; net profit was US$3.4 billion, a decrease of 41% compared to US$5.7 billion in the same period last year; Not in accordance with the General Accounting Standards, net profit was US$5.7 billion, a decrease of 6% from the US$6.1 billion in the same period last year.

Intel CEO Pat Gelsinger (Pat Gelsinger) said that the global chip supply shortage may continue for two more years. Kissinger said that the supply constraints will continue until more production capacity goes online to meet chip demand. Data center business is challenged Data center business has become the main source of bad earnings this time. Intel’s financial report shows that the data center group’s revenue in the first quarter was US$5.6 billion, a 20% decrease from US$7 billion in the same period last year. The decline in demand for cloud computing chips and the decline in government and enterprise demand caused by the epidemic have all triggered a decline in data center revenue . As the group’s highest profitability business, the decline in data center profits also dragged down the overall gross profit margin, which fell by 5 percentage points year-on-year to 55.2%. From the industry perspective, Intel is undergoing a transformation from a “PC center” to a “data center”. But in the era when data has become the “new oil”, it is not only Intel that sees the cake of data centers, but Nvidia and AMD are trying to further seize this market through mergers and acquisitions. On the other hand, Intel’s customers in the data center field, Google, Amazon, and Alibaba, have all begun to develop their own chips. “Any customized chip is a differentiated competition for them. For them, the chip is a strategy, not a route choice.” Vice President of Intel Marketing Group and General Manager of China Industry Solutions Department Liang Yali responded to this earlier. On April 8, Intel launched the third-generation Xeon scalable processor and a series of related product portfolios, which were regarded by the outside world as a counterattack to AMD’s attack. Among them, Ice Lake is Intel’s first server chip using 10nm. In addition, in the financial report data, Intel’s personal computer chip business revenue was 10.6 billion US dollars, an increase of 8% over the same period last year. The overall demand for this major notebook computer market has increased. However, it is also worth noting that the past high-end product line cooperation On the other hand, Apple has also begun to use more self-developed chips in the Mac product line. In the entire Intel’s quarterly report, the biggest bright spot is that the autonomous driving system company Mobileye’s revenue rose by 48% year-on-year to 377 million US dollars, and its operating profit rose by 67% year-on-year. “Lack of core” trend will continue At present, the shortage of chips has gradually spread from some links such as foundry, packaging and testing to the entire industry chain, involving multiple consumer fields such as automobiles, mobile phones, and notebooks. As one of the main players in the chip supply chain, Intel claims that the global chip supply shortage may continue for two more years. Prior to this, in order to reverse Intel’s decline in competition in the semiconductor industry, Kissinger proposed the IDM 2.0 plan. In the financial report statement, Kissinger also stated that this year will be an “important year” for Intel. From an industry perspective, Intel represents the IDM (Integrated Device Manufacture) model. The manufacturer is responsible for the entire process of the chip from design to finished product. This model can ensure the integration of the product from design to manufacturing. But in terms of iteration efficiency and cost, the Foundry model represented by TSMC is currently more mainstream. In order to change the current foundry pattern based on TSMC, Intel plans to invest approximately US$20 billion in the construction of two new factories (fabs) in Arizona, the United States. Intel stated that it hopes to become a major provider of foundry production capacity and provide services to customers around the world from the United States and Europe. Research organization TrendForce said that Taiwan Semiconductor Manufacturing Company (TSMC) will begin using the 5nm process to produce Intel’s Core i3 chips in the second half of this year. But judging from the latest news, Intel seems to want to increase its manufacturing capacity centered on the United States in order to reduce its dependence on Asian manufacturers. For Intel at the moment, the biggest problem is that the expansion investment plan may take several years to provide profits for it. In the financial report, Intel expects Q2 revenue of US$17.8 billion, slightly higher than the expected US$17.55 billion; however, the EPS forecast of US$1.05 is slightly lower than expected, and the company explained that it was affected by production capacity expansion expenses. As of press time, Intel reported $62.57 per share. It placed an order of 1.77% on Thursday and dropped 2.17% after the market.