Intel CEO Robert Swan at the last quarterly reporting conference more often mentions the lack of production capacity in the context of increasing costs and changing the structure of the assortment of processors to more expensive multi-core models. Such metamorphosis enabled Intel to increase the average CPU sales price by 13% in the first quarter of the mobile segment and by 7% on the desktop, compared to the same period last year. At the same time, the sales volume of processors decreased by 7% and 8%, respectively. The total income of the division of customer products increased by 4%.
However, revenue from the sale of desktop components in the first quarter still decreased by 1%, although in the mobile segment there is an increase in revenues by 5%. In the first quarter, Intel managed to win 26% more modem sales than the previous year. However, in absolute terms, revenue from modem sales did not exceed $ 800 million, so its growth can hardly be considered a determining factor based on a total revenue of $ 8.6 billion.
The lack of energy limits the growth of processor sales
However, it can not be argued that Intel is satisfied with the impact of the lack of revenue data. Yes, it began to sell more expensive processors, but financial director George Davis (George Davies) in his comments admitted that the processor sales were limited by the limited production capacity of the company.
In the second quarter, as foreseen by the CFO, the PC segment will generate 8-9% less revenue due to an increase in the share of processors with fewer cores and more compact crystals. The average selling price of the processors will be reduced, and this will have a negative impact on revenue.
In the first quarter, Intel's revenue kept strong demand for gaming systems and commercial computing. By the end of the year, the need to spend on mastering 10nm technology will have a negative impact on Intel's operating profit margin, which will not exceed 32%. In part, this impact will be offset by reducing the company's cost of $ 1 billion, including the refusal to develop 5G modems for smartphones.
The lack of a processor will be felt in the third quarter
Robert Swan explained that the company has taken measures to increase the production of 14nm processors in the second half of the year, but this will still not be enough to completely defeat the deficit. The company's customers will have to accept the fact that in the third quarter the priority in supply will be given to the more expensive processor models. By the way, this policy has already led to a noticeable strengthening of AMD's position in the laptops with the operating system of Google Chrome OS, according to independent analysts.
At the same time, Swan explained what would be spent on the funds released as part of the optimization of costs. In addition to the development of 10nm and 7nm technology, priority will be given to accelerate the release of new products in client and server segments, as well as the development of artificial intelligence, autonomous vehicles and 5G network infrastructure. Mobileye, for example, increased its revenue by 38% in the first quarter, bringing it to a record level. In the automotive direction, Intel has not only new products, but also new customers.
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