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Even Intel doesn't seem to know what's going to happen to Intel



In the semiconductor industry, "mixed signal" usually refers to chips that combine digital and analog circuits.

When referring to Intel Corp.

INTC, -1.44%

right now, but the standard definition of that phrase is more accurate.

During the quarter, Intel executives introduced $ 2.5 billion in revenue from its forecast, referring to trade wars with China, caution among CIOs who buy technology, and the high stock levels of the chip industry. On Thursday, they returned $ 500 million to this forecast, yet suggested that the same uncertainty exists.

The market dynamics that led the company to lower its guidance in April "remain largely in place, although memory has continued to deteriorate against our expectations," said CEO Bob Swan on Thursday afternoon.

Waffle at its annual The forecast comes in the middle of one of the most uncertain periods in the history of Silicon Valley's most popular chip producer, who named Swan the CEO earlier this year after a long search for a replacement for his predecessor, who was shown the door. made his biggest move yet to get Intel's house in order, just raising the question of what his next move will be.

Prior to announcing revenue in the second quarter, Intel announced that it will sell Apple's smartphone chip business.

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in a deal that values ​​the unit at $ 1 billion. The deal is expected since Apple dropped its worldwide legal battle against modem specialist and Intel rival Qualcomm Inc.

QCOM, -0.69%

but Wall Street expects Swan not to stop there.

More from Therese: Qualcomm gets maturity in the settlement, but Apple may have rescued iPhone from 5G doom

Much of the speculation involves Intel's memory business, which many expect to be next on the scrap stone. In the second quarter return announced on Thursday, Intel saw no improvement in that unit, with revenue down 13%. That kind of performance can give the rumors even more despite the possibility that a sale may mean the loss of another manufacturing facility.

The tough decisions follow a tough time for Intel, who was having production problems last year as it seems to finally appear. It was behind in the transition to a new 10-nanometer production process, and at the same time it failed to earn enough of its high-end chips for PCs. At the same time, a decrease in the semiconductor, led by a large stock of memory chips, increased additional pressure.

Overall, Intel's data-centric business – which includes sales of memory and data center – was 7% from last year. . The data center business, which was once the company's largest growth driver, faces uncertainty and slower purchases from cloud-based companies.

See also: The promise of a magic rebound for tech comes with little evidence to back it up

“Although we have seen a weaker first half in the datacenter business, we expect a better second half as demand from cloud and service providers is improving and our second gene Xeon Scalable continues to ramp, ”said Swan, referring to Intel's processors designed for servers and data centers.

Investors enjoyed Intel's higher revenue forecast and sent stocks 5% higher in afternoon trading. But combined with the mixed signals in the conversation and the uncertain future of some business segments, there is little to feel safe at least right now. The clearest signal for investors can be one of caution and continued uncertainty for the chip industry.


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