Intel lost a lot of money and we have to pay for it

Intel lost a lot of money and we have to pay for it

Intel’s cart is running badly, so the company’s products will become more expensive.

From the outside, it may have seemed that Intel is living particularly successful times, as the Alder Lake processors launched in the autumn were well received by testers and customers, the company’s Arc video cards will be launched this year, and the United States Senate in the next few days voted for the CHIPS Act supporting American chip production, which provides billions of dollars in treasury money for the development of Intel’s capacities.

However, the company’s financial report held on Thursday surprises even the analysts and paints a particularly gloomy picture, which customers will also feel in their wallets. In the previous quarter, Intel managed to accumulate a loss of 500 million dollars, a 109% decrease compared to the same period last year. The hefty minus came with a total revenue of 19.6 billion dollars, which is 22% below the result registered in the same period of 2021. And if we only look at Intel’s PC business branch (Client Computing Group), here the revenues decreased by 25%, bringing a result of 7.7 billion dollars. In addition, the blues are not more optimistic about the next quarter either: assuming that the decline will continue, they expect revenue of around 15-16 billion dollars. The company cited declining PC demand and soaring inflation as reasons for the poor business performance. Ultimately, it will be the customers who will drink the juice. The Nikkei Asia already aired some weeks ago that the due to financial deterioration, Intel may implement a 10-20% price increase, and now the company itself has confirmed the partial transfer of the burden. Financial manager David Zisner stated that they have only been able to resist the inflationary effect so far, so they will raise prices in the fourth quarter.

“You know, we can absorb a lot of inflationary effects that others can’t. And so we’ve been able to hold out a little bit longer… But now that some of the price increases and inflationary increases have proven to be more durable, there’s a certain amount that we have to pass on to the for customers.” Unfortunately, Zisner’s statement did not reveal the rate of price increase, nor exactly which products will be affected by the move. At the same time, Pat Gelsinger, the company’s CEO, did not shift the responsibility one-on-one to the market environment. The CEO said that although the rapid decline of the economy is primarily behind the losses, there were also implementation problems at the company. The manager also admitted that there are problems with the drivers of the Arc graphics chips, which are thus “clearly underpowered”. Gelsinger now predicts overall that they will not be able to meet the 4 million GPU sales target for this year.Finally, it is worth mentioning that the strange times do not only have restrictions for customers: Intel has officially stopped the production and distribution of Optane memories, and is also selling its drone business. Are you more seriously interested in IT? You can find our news and analyzes for IT and infocommunications decision-makers here.

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