Apr 23, 2021 14:00:00

Intel announces first quarter 2021 financial results, data center division is slumping, PC division is up

Chip maker Intel has released its financial results for the first quarter of 2021 (January-March). This is the first report of financial results since CEO Patrick Gelsinger took office, and profits decreased compared to the same period of the previous year. However, Gelsinger, who launched the foundry expansion business, expects a turnaround in the second quarter of 2021 (April-June).

Intel Reports First-Quarter 2021 Financial Results :: Intel Corporation (INTC)
https://www.intc.com/news-events/press-releases/detail/1460/intel-reports-first-quarter-2021-financial-results

Intel Data Center Sales Slump Stokes Concern About Market Share --Bloomberg
https://www.bloomberg.com/news/articles/2021-04-22/intel-reports-20-drop-in-data-center-sales-gross-margin-falls

Intel's earnings report for the first quarter of 2021 is as follows.

	First Quarter 2021 ( GAAP )	Year-over-year basis	First Quarter 2021 (non-GAAP)	Year-over-year basis
Revenue	19.7 billion dollars (about 2.1 trillion yen)	1% down	18.6 billion dollars (about 2.1 trillion yen)	No change
Profit rate	55.2%	5.4 points down	64.5%	6.1 points down
Operating income	18.8%	16.7 points down	32.8%	6.7 points down
tax rate	14.0%	0.5 points down	13.7%	No change
Net income	3.4 billion dollars (about 376 billion yen)	41% down	5.7 billion dollars (about 615 billion yen)	6% down
Earnings per share	0.82 dollars (about 89 yen)	37% down	$ 1.39 (about 150 yen)	1% down

According to Intel, operating profit, net profit, tax rate, and profit per share fell from the same period of the previous year in a jury trial over a patent lawsuit from VLSI, an integrated circuit design company. It is because the cost is reflected. In addition, Intel strongly opposes the ruling demanding payment of damages of more than 230 billion yen and plans to appeal it.

Intel receives order to pay damages for patent infringement over 230 billion yen --GIGAZINE

Revenue for cloud service providers decreased 29% year-on-year. Intel explains that the reason is 'because the customer has forgotten the order due to inventory control.' However, overseas news media Bloomberg pointed out that 'Intel is lagging behind in launching new products, so investors are concerned about'the possibility that important customers will shift to other companies' products'.' I am.

And data center revenue was $ 5.6 billion, down 20% year-over-year, below Wall Street analysts' expectations. 'The slump in Intel's main business, the profitable data center division, also led to lower profit margins,' Bloomberg said.

However, the PC sector increased 8% year-on-year to $ 10.6 billion, slightly above analysts' forecast of $ 10 billion. Intel speculates that this is due to the increased demand for laptops from remote work environments due to the prolonged pandemic of the new coronavirus. In addition, while CEO Gelsinger commented that 'there are no signs that PC demand will slow down,' he said, 'In 2021, costs will inevitably increase due to a shortage of semiconductor supply,' and will aggressively gain market share. I'm showing a readiness to work on it.

And the financial results forecast for the second quarter of 2021 and the full year of 2021 by Intel are as follows.

2021 Q2 Financial Results Forecast	GAAP	non-GAAP
Revenue	18.9 billion dollars (about 2 trillion yen)	17.8 billion dollars (about 1.92 trillion yen)
Profit rate	55%	57%
tax rate	13%	13%
Earnings per share	1.05 dollars (about 110 yen)	1.05 dollars (about 110 yen)
2021 full-year financial results forecast	GAAP	non-GAAP
Revenue	77 billion dollars (8.33 trillion yen)	72.5 billion dollars (7.83 trillion yen)
Profit rate	54.5%	56.5%
tax rate	19%	13%
Earnings per share	4.00 dollars (about 430 yen)	$ 4.60 (about 500 yen)
Year-round capital investment	$ 19 billion to $ 20 billion (Approximately 2.5 trillion yen to 2.15 trillion yen)	$ 19 billion to $ 20 billion
Free cash flow	Not applicable	10.5 billion dollars (about 1.13 trillion yen)

According to economic news media CNBC , Intel's outlook is slightly above analysts' expectations. '2021 will be a crucial year for Intel,' Gelsinger said in a statement.

In March 2021, CEO Gelsinger announced that he would invest $ 20 billion in a new microchip manufacturing plant, and plans to act as a foundry that manufactures chips of other companies in addition to his own chips. 0 'was announced.

Will Intel's foundry service expansion strategy 'IDM 2.0' be a clue to Intel's revival? --GIGAZINE

In addition, Intel announced the 11th generation Core processor 'Rocket Lake-S' as its main product in March 2021. In addition, in April 2021, we announced the 3rd generation Xeon Scalable Processors, which are CPUs for data centers.

Intel announces 3rd generation 'Xeon Scalable Processors', adopts 10nm process & greatly improves performance with up to 40 cores --GIGAZINE

In addition, Intel will make various efforts in the first quarter of 2021 in the financial report, such as the alliance with Google Cloud in 5G network and joint development of autonomous driving chips by Intel's autonomous driving technology development company Mobileye and Intel. I am appealing.