Home Business New Intel CEO wants them to again be the ‘unquestioned leader’ in...

New Intel CEO wants them to again be the ‘unquestioned leader’ in industry


amd, cpu, processor

Gelsinger, who starts his job on February 15, has a challenging task ahead: Intel has fallen behind competitors in manufacturing the most advanced chips, putting it at risk of losing share in key markets. But Gelsinger told analysts that Intel is not “interested in just closing gaps” with its rivals.

“We’re interested in resuming that position of the unquestioned leader in process technology, and that’s our commitment,” Gelsinger said. He joined the earnings call along with outgoing CEO Bob Swan, though he doesn’t actually take over the role for three more weeks.

Still, it appears that investors are wary. The company’s stock fell nearly 10% on Friday, although it posted better-than-expected earnings Thursday.

The semiconductor giant reported fourth quarter earnings of $1.42 per share on revenue of $20 billion, beating the $1.10 in earnings per share on revenue of $17.5 billion Wall Street analysts had projected. Full year revenue hit a record $77.9 billion, up 8% from 2019. Intel also announced it would boost its quarterly dividend.

Intel shares initially rose Thursday after the report was released several minutes ahead of the closing bell, ending the day up 6.5%. But the company said later that evening that it had released the results early, just before the close, because of reports of unauthorized access to its earnings information, a breach the company is investigating. Shares fell in premarket trading following the news of the breach.

Investors on Friday may also have been reacting to the plans executives discussed during the Thursday earnings call for getting the company back on track.

A major concern for Intel has been its next generation 7-nanometer chip — the company said in July that the technology would be delayed by about six months, to late 2022 or early 2023. Meanwhile, competitors Taiwan Semiconductor Manufacturing Company and Samsung have already produced 7-nanometer chips and are moving on to even more advanced technology, threatening to put Intel even further behind and helping rivals such as AMD steal market share.
Last month, activist shareholder Dan Loeb of Third Point wrote to Intel’s board chair urging the company to consider major changes, including whether to continue manufacturing its own chips. The alternative would be outsourcing production to third-party foundries, such as TSMC’s, as many of Intel’s competitors do.

Gelsinger and Swan suggested during the call that Intel is likely to keep production in-house for the 7-nanometer chip, though the company pledged to provide more details on its manufacturing plans after Gelsinger takes over.

“I’ve had the opportunity to personally examine progress on Intel’s 7-nanometer technology over the last week,” Gelsinger said during the call. “Based on initial reviews, I am pleased with the progress made on the health and recovery of the 7-nanometer program. I am confident that the majority of our 2023 products will be manufactured internally.”

Gelsinger added, however, that because of the breadth of Intel’s portfolio, the company will likely “expand our use of external foundries for certain technologies and products.”

Outsourcing some production could help Intel fill gaps in its product line as it addresses its manufacturing issues, analysts say.

However, some are concerned that there isn’t a quick fix, regardless of the approach Intel decides to take.

“Competitive threats remain the biggest concern,” Bank of America analysts said in a Thursday research note. They added that AMD could gain even more market share at Intel’s expense because it outsources production to TSMC, which will be making more advanced processors by the time Intel’s 7-nanometer production has ramped up in 2023.

“The world is becoming more digitally connected, expanding the market in front of us,” Gelsinger said. “There is an enormous opportunity ahead for Intel, but to be able to seize these opportunities, we have to deliver the best products and stay ahead of our customers’ needs. We need to become more agile in a very competitive market.”


Source link


Please enter your comment!
Please enter your name here