Intel Corp. shares the shares of Paloma and rival of Advanced Micro Devices Inc. gained in after-hours operations on Thursday, when Intel reported that its next generation of semiconductor technology will be delayed.
Intel INTC,
Along with second-quarter earnings, he reported that the introduction of his 7-nanometer chips would be delayed by at least six months. AMD AMD,
is already selling 7nm semiconductors for servers and PCs; in chip language, nanometers or nm, it refers to the size of the transistors that go on a computer chip, with the general rule that smaller transistors are faster and more energy efficient.
“The 7nm boost is not a positive announcement as many products relied on it,” said Patrick Moorhead, principal analyst at Moor Insights & Strategy. “Knowing Intel, it always has backups for its backups and I am confident that we will hear about improvements at 10nm to increase its competitiveness.”
“We now expect to increase our 10 nanometer commodity shipments for the year by more than 20% compared to our expectations for January,” Bob Swan, Intel’s chief executive officer, said in the call.
“We have identified a defect mode in our 7 nanometer process that resulted in performance degradation,” Swan said on the call. “We have caused the problem at the root and we believe that there are no fundamental obstacles, but we have also invested in contingency plans to protect themselves from further uncertainty on the schedule.”
Swan said he expects Intel to ship its first 7nm CPU products in late 2022 or early 2023, with data center products coming in the first half of 2023.
The rest of Intel’s earnings report showed that the chipmaker continued to find strong demand for server and computer chips amid the COVID-19 pandemic. The company reported second-quarter net income of $ 5.1 billion, or $ 1.19 per share, compared to $ 4.18 billion, or 92 cents per share, in the same period last year. After adjusting restructuring and acquisition-related costs, Intel reported earnings of $ 1.23 per share, compared to $ 1.06 per share in the prior-year quarter. Revenue grew 20% to $ 19.7 billion from $ 16.51 billion in the prior year quarter.
Analysts surveyed by FactSet had forecast adjusted earnings of $ 1.11 per share on revenue of $ 18.54 billion.
“It was an excellent quarter, well above our expectations for continued strong demand for computing performance to support cloud-delivered services, a home learning and work environment, and building 5G networks,” said the president. Executive Bob. Swan said in Thursday’s announcement.
Intel also reinstated the guidance that exceeded Wall Street expectations. For the third quarter, Intel forecast adjusted earnings of $ 1.10 per share on revenue of approximately $ 18.2 billion; For the full year, Intel restored the $ 75 billion guidance on adjusted earnings and earnings of $ 4.85 per share. Analysts on average expected third-quarter adjusted earnings of $ 1.11 per share and revenue of $ 17.92 billion, while projecting full-year adjusted earnings of $ 4.81 per share and sales of $ 73.92 billion, according to FactSet.
Intel shares sank more than 9% after hours, after a 1.1% decline in the regular session to close at $ 60.40, giving Intel a market cap of $ 255.7 billion. Intel has recently been challenged for market capitalization leadership in the Silicon Valley semiconductor sector by neighboring corporate and video game chip specialist Nvidia Corp. NVDA,
which ended the trading session with a market capitalization of $ 249.2 billion, according to FactSet.
Intel’s financial performance weathered supply chain problems when the pandemic caused outages in China in the first quarter, and has largely thrived as COVID-19 spread due to needs for cloud computing and a increase in sales of personal computers. The company’s server chip sales increased 43% in the quarter, while the traditional PC segment grew 7%.
For more information: Intel has resisted coronavirus due to PC and data center sales
Revenue from the data center group, or DCG, rose to $ 7.1 billion, while analysts expected it to rise $ 6.61 billion, despite increased competition from AMD. Intel’s largest segment, customer computing, the traditional PC group, rose to $ 9.5 billion, and analysts expect a 2.9% rise to $ 9.1 billion amid strong PC sales in recent years. months.
Memory chips have also been in demand for “hyperscalers” to build clouds, and Intel reported that its revenue from nonvolatile memory solutions increased 76% to $ 1.7 billion, while Wall Street expected a 37% increase to $ 1.29 billion.
On the other hand, “Internet of Things” or IoT, revenue was a disappointment, dropping 32% to $ 670 million, compared to an expected 12% decline to $ 865.6 million. Mobileye’s revenue also declined, falling 27% to $ 146 million, while Street expected $ 217.4 million.
While Intel shares were up less than 1% for the year to date as of Thursday’s close, AMD gained 30% on the year and Nvidia’s shares recovered 72%.
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