Intel’s first quarter revenue was down by 7% year over year, even as the chipmaker saw record revenues in network and edge revenues, as well as its Mobileye and foundry businesses.
Revenue for the quarter was $18.4 billion, representing a “strong start to the year,” said CEO Pat Gelsinger in a statement. He noted the company’s plans to expand manufacturing in the U.S. and Europe, even as the semiconductor sector broadly still faces some shortages.
The company noted its client computing group saw a 13% drop in revenues from a year ago, reaching $9.3 billion, while all other business units saw improvements. The group’s Alder Lake 12th generation chip saw “continued adoption,” as Intel put it, with more than 250 designs planned for this year.
Other groups improved, including a 22% improvement for datacenter and AI, reaching $6 billion. Network and edge was up 23% to $2.2 billion. Intel Foundry Services improved 175% compared to a year ago when it was brand new, reaching $283 million. Mobileye, which Intel is spinning off as a public company, was up by 5% to $394 million. And accelerated computing systems and graphis were up by 21% to $219 million.
Intel described Mobileye’s True Redundancy sensing system for hands-free vehicle operation, a milestone in a planned robotaxi service for Israel and Germany.
The outlook for the second quarter calls for $18 billion in revenue, with a 48% gross margin and 50 cents earnings per share. First quarter gross margin was 50.4% with $1.98 earnings per share. Shares of Intel closed up by 3.5% to $46.84, although initial after hours trading caused a 4% decline.
In comments to analysts on an earnings call, Gelsinger said supply chain lockdowns in China and the war in Ukraine “demonstrate that the world needs a more balanced semiconductor supply.”
The semiconductor shortage cost the U.S. economy $240 billion in 2021, he said. Foundry capacity and tool availability will be tight through 2024, but fab and substrate supply at Intel “are close to meeting customer demand for the first time in five years,” Gelsinger said.
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Chief Financial Officer David Zinsner said lockdowns in Shanghai are beginning to lift but if lockdowns take much longer, there could be a bigger impact on Intel's expected $18 billion in revenues for second quarter. The $18 billion revenue projection is 3% lower than one year ago.
Zinsner also projected PC revenues will improve in the second half of the year, while Gelsinger said other segments look positive, especially data center and artificial intelligence.
“We’re confident in our second half outlook,” Gelsinger said. “We see solid growth across all the business areas of the company.”