Chip giant Intel with a loss of billions

For the time being, the dry period at chip giant Intel will not end. The semiconductor pioneer closed the past quarter with another drop in turnover and a loss of billions. Management hopes for better business in the second half of the year.

Intel posted a quarterly loss of $2.8 billion after being in the black of $8.1 billion a year earlier. It was the highest minus to date for the group, which had long been accustomed to success. Revenue fell 36 percent year-over-year to $11.7 billion, Intel announced after the U.S. stock market closed on Thursday.

On the one hand, Intel is struggling with the cooling of the PC market after the boom at the start of the pandemic – sales of processors for notebook and desktop computers fell 38 percent to $5.8 billion. But data center technology also fell again: the division’s revenue fell by 39 percent to $ 3.7 billion. Intel lost market share to smaller rival AMD in the lucrative trade.

Intel’s car company Mobileye, which specializes in driver assistance systems and technology, was a bright spot with sales up 16 percent to $458 million.

Expand capabilities in Europe

Intel boss Pat Gelsinger is trying to get the industry giant back on track after delays in new processor generations and other issues. His plan includes making Intel more of a contract manufacturer for other chip suppliers. The group also wants to expand its capacity in Europe with a factory in Germany. That would cost tens of billions of dollars, part of which would come from government grants.

For the current quarter, Intel expects revenue between $11.5 and $12.5 billion and again in the red. Gelsinger, however, hopes for a recovery in the second half of the year. It becomes clear, among other things, that the high chip stocks would gradually be reduced. After bottlenecks in the pandemic, many manufacturers had semiconductors tucked away just in case.

The stock went on a roller coaster ride after the quarterly reporting. First, it rose four percent in after-hours trading as analysts had expected even worse numbers. A little later it turned negative and lost more than 1.5 percent. Gelsinger, however, encouraged investors with his bullish statements, and the stock ended almost five percent higher after close. (sda/dpa)