Where is Intel getting all this money from? The truth is its CPU business is fairly robust despite ongoing shortages – which are going to continue until 2H 2020 by the way – and it’s nonchalantly posting record yearly revenue despite ongoing concerns.
From a PC builder’s perspective it’s easy to write-off Intel’s products next to the latest lineup from AMD – Ryzen has it on the ropes when it comes to the best CPUs for gaming and is continuing to make inroads elsewhere in the market. But it would appear that no matter the hurdle – shortages, process node disparity, or ageing architecture – Intel’s still earning them dollar dollar bills, y’all.
During its Q4 2019 earnings call yesterday, Intel’s CEO (and ex-CFO) Bob Swan reports a fourth consecutive record year. In Q4 alone, the company generated $20.2bn… pocket money, really. The grand total for the full year stacks up to $72bn. All the while it’s apparently tripping over its own shoelaces… and right into the top semiconductor manufacturer spot.
Intel’s biggest revenue raiser was its Data Centric Group (DCG), which now accounts for a sizeable chunk of the company’s revenue vs. the PC-centric Group. IoT, memory, and Mobileye businesses set all-time records.
|Q4 2019||vs. Q4 2018||2019||vs. 2018|
|DCG||$7.2bn||up 19%||$23.5bn||up 2%|
|Data-centric||IoTG||$920m||up 13%||$3.8n||up 11%|
|Mobileye||$24m||up 31%||$879m||up 26%|
|NSG||$1.2bn||up 10%||$4.4bn||up 1%|
|PSG||$505m||down 17%||$2bn||down 6%|
The only side of Intel’s business that has shrunk this year is PSG, its programmable devices segment. That’s reportedly down to less embedded cash coming in late in the year.
CCG, the bit where our gaming chips come from, still makes up the largest part of Intel’s business. While a cheeky $37.1bn in the bank, it’s not experienced any tangible growth year-over-year.
But let’s not pretend the company doesn’t have some issues, too. During the call the question of returning to a buoyant inventory came up on various occasions. Intel plans for its own inventory to normalise by the second half of 2020, but that the channel (OEMs and retailers) may still struggle during that time.
— Gregory M Bryant (@gregorymbryant) January 24, 2020
“The channel inventories exiting the year for PC, I would say, are relatively low,” Swan says (via Seeking Alpha). “And that’s on us. So I do expect during the course of the year we will build our inventory levels to more deal with spikes in demand. But at the same time, we expect the channel to be at more healthy levels as we exit 2020 and then through 2021.”
As for its process node woes, Intel confirms that 7nm is on track for 2021 with Ponte Vecchio, an Intel Xe supercomputer GPU, with “CPUs to closely follow.” 10nm is also maintaining its somewhat delayed trajectory, which will mean a few more generations of 14nm for us desktop gamers yet – such as Intel Comet Lake this year.
Intel will also have to stem the bleeding to the red team at some point, or its fortune will, probably, at some point, maybe, start drying up.