Status: 01/27/2022 10:54 am
The increased demand for data centers, also due to the pandemic, is causing the sales of the US chip manufacturer Intel to continue to rise. The company is having problems with the costs of expanding chip production and Apple’s strategy.
The chip manufacturer Intel achieved record sales in the fourth quarter of the past fiscal year despite delivery problems. Sales rose from October to December compared to the previous year by four percent to 20.5 billion dollars, said the largest chip company in the United States. “The fourth quarter was a great end to a great year,” said Pat Gelsinger, CEO of the US group. Bottom line, however, the quarterly profit fell by 21 percent to $ 4.6 billion
The company took in a total of $79 billion in 2021, which equates to around €70 billion – an increase of one percent. Compared to the previous year, profits fell by five percent to $ 19.9 billion.
Internet traffic is increasing and increasing
An important success factor for Intel was the growth in the business with chips for data centers. The demand for capacity in data centers has been increasing for years and the growth accelerated even further in the Corona pandemic with video conferencing and more digital entertainment. Intel is one of the vendors benefiting from this. Quarterly sales in this area increased by 20 percent to $7.3 billion.
In the business with PC processors, however, the proceeds fell by seven percent to 10.1 billion dollars. The PC market experienced a strong upswing during the corona pandemic – but there was a setback at the end of last year, partly because of the global component bottlenecks. Intel also has the problem that Apple is switching more and more models of its Macbook computers to chips it has developed itself. As a result, Intel sold a total of 26 percent fewer notebook processors in the past quarter than a year earlier.
Expanding production is expensive
Profitability was impacted by high costs for expanding production. However, Gelsinger was determined to push ahead with the billion-euro investments. Last week alone, Intel announced plans to build two new factories in the US state of Ohio for more than $20 billion.
Gelsinger’s strategy includes making Intel a contract manufacturer that produces chips for other suppliers in addition to its own processors. The group is currently looking for a location for a new factory in Europe. Germany is hoping for a surcharge. The group wants to make a decision in the next few months – also depending on the chip support program European Chips Act.
The group also commented on the current lack of chips. According to the industry giant, it will last at least another year. The bottlenecks are likely to last until 2023, with the situation gradually improving, the Intel boss said.