Hold on... terrible quarter for Intel

It has been a long time since they have a net loss, but it happened this quarter. Revenue missed by quite a lot. Non-Gaap is still positive though.

You can read all the gory details here:

down about 8% after hours, after 1.7% drop during the day. A slaughter.

Got to feel for Intel though.
Tax rate from Q1 2021 to Q1 2022, went from 11.9% to 50.1% on top of everything else.
An operating margin loss?

I don’t understand how that could happen so quickly and without warning or rumours.

The “surprise” is a problem, and concerned one analyst enough he asked how they could fail to warn earlier.

They did take care of some “one time” events.
They are going to exit the optane (flash server memory) business and took a substantial charge for that.
They admitted they needed to do a stepping on Sapphire Rapids, and it has not yet qualified so wrote off a lot of Sapphire rapids product.

On the plus side they say Emerald rapids N7 server looks good. In addition the N3 server parts Granite Rapids, and Sierra forest have taped out.

It will be interesting to see what AMDs results are.

… looks like an iceberg up ahead …

I’m telling you, 2022 is going to be very ugly for Intel. Manufacturing delays, 13th Gen power usage, no meaningful server market response to AMD in 2022, ARC GPUS are such a failure the entire GPU line may be canceled before Battlemage is released, record Cap Ex expenditures on Fabs, record hiring numbers in the 2nd quarter… Operating Losses in the second quarter before the product failures even really start impacting sales.

More here on how badly ARC is messed up from Moore’s Law is Dead.
Intel ARC Cancellation Leak: Alchemist may end up a waste of sand…

Not saying Intel will sink, just wondering where they will be in 2023? It’s going to get really ugly before it gets better.

1 Like

Intel execution on both Sapphire Rapids and ARC has been a disaster. At least Intel has finally admitted they have a problem, but it leaves most everybody with little confidence in the planned second half 2022 product releases. For completeness, this is what they have said:
Meteor Lake N4 Client is now broadly sampling, on track for 2023 (note that this is at least 2 years later than the original schedule)
Granite Rapids and Sierra Forrest N3 servers have taped out, on track for 2024.

Sapphire Rapids and SR + HBM will begin shipments in H2 (at least one year behind the original schedule)
Ponte Vecchio datacenter GPU will begin shipments in H2 (at least one year behind the original schedule)
They will build out the Aurora supercomputer… finally.
Raptor Lake client will ship.

Things I expect:
Intel remains strong in the client space
They continue to give up server share to AMD for the “hyperscalers”
They begin to take AI compute share from NVIDIA

Raj Koduri no longer working for Intel
Late 2022 meteor lake shipment announcement
→ broadly sampling now, and they have said H2 process is ready.