Cailianshe (Shanghai, editor Huang Junzhi) reported that after the market trading on Wednesday, Eastern Time, Intel released its fourth-quarter results report as of December 26, 2021. Although Q4 revenue and adjusted earnings per share both exceeded expectations, the net profit i

financial report shows that Intel's adjusted earnings per share in the fourth quarter was $1.09, better than the market's expectations of $0.91; revenue was $19.5 billion, up 4% from $18.9 billion in the same period last year, and better than the market's expectations of $18.31 billion; net profit was $4.5 billion, down 27% from the $6.1 billion in the same period last year.

Full of 2021, Intel adjusted revenue was US$74.7 billion, an increase of 2% compared with US$72.9 billion in fiscal 2020; net profit was US$22.4 billion, an increase of 4% compared with US$21.6 billion in the previous year; earnings per share was US$5.47, an increase of 7% compared with US$5.10 in the previous year.

Intel said it expects adjusted revenue to reach $18.3 billion in the first quarter of 2022, surpassing analysts' general expectations of $17.62 billion.

Personal PC business

Data shows that Intel's largest business, Client Computing Group, saw sales in the fourth quarter fall 7% year-on-year to $10.1 billion, but still higher than the average analyst estimate of $9.6 billion. The annual revenue in 2021 was US$40.5 billion, an increase of 1% compared with the previous year.

Intel CEO Pat Gelsinger said in an interview that the annual decline in the division, including Intel's personal computer chip business, is the result of customers and PC manufacturers shifting sales from one quarter to another. Personal computer sales have been rising since the beginning of the 2020 pandemic, including a quarter last December.

"I won't give any interpretation of quarterly quarter data," Gelsinger said, adding that supply restrictions are also a factor.

Gelsinger also said he expects PC sales to remain strong. Microsoft announced on Tuesday that its personal computer business revenue grew by nearly 16% from the same period last year, surpassing expectations. Satya Nadella, CEO of the company, also said demand is strong across the business sector.

data center business also exceeded expectations

In addition, Intel's data center division (Data Center Group) also exceeded expectations, growing 20% ​​to US$7.3 billion, higher than the average expectation of US$6.7 billion. "In the fourth quarter, internal, corporate and government departments performed strongly," he added that some customers were having trouble getting parts like Ethernet power controllers that were necessary to build new Intel servers.

Gelsinger said the company's next-generation server chip Sapphire Rapids will start shipping this quarter as planned and will increase production in the second quarter. Analysts have worried that the chip would delay production because it uses a new process.

Mobileye is an Intel subsidiary focused on autonomous vehicle technology. The company's revenue in the quarter was US$356 million, a year-on-year increase of 7%. Intel said in December that it plans to get the division listed.

Expanding capital expenditures

Less than a year ago, Gelsinger took over Intel and began a period of large-scale capital expenditures. Under Gail Singh's leadership, Intel announced that it will continue to produce its own personal computers and server chips, and in a strategic shift, it will also begin producing designs from other companies.

This strategy requires new facilities and investment. "First of all, we have to invest to catch up. We're lagging behind in capacity, you know, we're eager to have some free capacity today," Gelsinger said.

Intel announced last week that it plans to build a chip production base in Ohio, which is expected to start production in 2025, which will accommodate eight chip manufacturers. Intel said it will invest at least $20 billion to put the first two factories into operation. Last quarter, the company warned that its profit margins will shrink in the next two to three years as the company invests in increasing production capacity.

It is reported that the final scale of Ohio complex facilities is related to legislation in the Chip Act, which will provide semiconductor companies with $52 billion in subsidy funds. If the subsidy is approved, Intel could invest up to $100 billion in the factory. Last week, Gelsinger attended a White House event with President Biden, encouraging Congress to pass the legislation.

Before investing in Ohio, Intel also announced last year that it plans to invest $20 billion to expand its existing production facilities in Arizona.

In February this year, Intel will give investors a comprehensive introduction to its strategy and technology roadmap, and investors are closely watching Intel's operating margins as the company is investing in increasing capacity. Gelsinger said Intel will also showcase a technology roadmap for its consumer and data center chips.