Intel -- April 16, 2024

Locator: 47019TECH.

Before we get started, all this is a mix of factoids, facts, opinion, rambling, and all of it hard to tell one data point from another with regard to veracity / accuracy / relevancy. It's for me to try to sort out what's going on with Intel. I remarked earlier that it appears Intel does not know what business it is in. That's the first opinion.

Don't quote me on any of this. Read at your own risk. If it's important to you go the source. Start with the hyperlinks.

"Below the fold," is something I posted earlier today. Now I have time to go back to take a better look at the notes taken from the Intel webinar earlier in April that was the subject of the post.

Again, the link.

April 3, 2024: Intel reorganizes:

The reorg will see Intel report results from the following divisions:

• Intel Products
• CCG: client computing group
• DCAI: data center and AI
• NEX: network and Edge
• Intel Foundry
• All Other
• Altera, an Intel company, formerly Intel's programmable solutions group;
• Mobileye;
• other

But look at this, which seems very, very strange:

Foundry will charge Intel Products to make stuff, at what Intel has described as "a market-based price." Intel thinks it will also improve margins at Intel Products, in part because the true cost of requests for expedited manufacturing of certain wafers was hidden from product teams. Gelsinger said since Intel made those costs transparent, requests for expedited production fell by 95 percent.

Is that like one GM division charging another GM division for parts at market prices? Or like Harold Hamm's frack team charging Harold Hamm's drilling team to frack the well at market prices?

Is this taking Jack Welch's hiring / firing plan to the nth degree?

Intel's Gelsinger and CFO Zinsner said that the Foundry will turn the corner in 2027 with $15 billion in annual external revenue -- plus revenue from Intel Products. Not quite "to rob Peter to pay Paul" but there do seem to be similarities.

That will be quite a turnaround. Intel's rejigged set of financial filings (PDF) revealed:

The Foundry's 2023 revenue of $18.9 billion was well down on the $27.5 billion generated in 2022, while losses measured by operating income slipped from 2022's $5.17 billion to $6.95 billion. Gelsinger said things could deteriorate further in 2024, which will be Foundry's worst year. But he also predicted profitability in 2027.

And 2023 was an incredible year for the "magnificent seven," the year that Intel's revenue went from almost $30 billion to $20 billion.

On the day this was all announced, "Intel shares plunged from $43.94 apiece to finish the day at $42.11, suggesting investors are not keen on this plan."

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Intel

From TipRanks: "don't touch." Although the full story is behind a paywall, from the little we get, we can google the rest. For now:

Last week was a bad week for Intel. 

The shares took a heavy beating, falling by 8% after, for the first time, the company released separate financials for its semiconductor manufacturing segment, what is known as its foundry business, or Intel Foundry.

The numbers didn’t look great.

The segment lost $7 billion in 2023, widening from 2022’s $5.2 billion loss, while sales dropped from $27.5 billion in 2022 to $18.9 billion last year.

To discuss its new reporting segment, the company held a webinar, during which it offered a timeline for the Foundry Operating Margin reaching breakeven.

This is the report, April 3, 2024, after the webinar, April 2, 2024, was held. 

I'm still not convinced Intel knows what business it is in, other than "tech," and "chips." Unlike Micron which knows exactly what business it's in.

Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple.

See disclaimer. This is not an investment site.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

Reminder: I am inappropriately exuberant about the US economy and the US market, I am also inappropriately exuberant about all things Apple. 

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The Music Page

Technology and a little sleuthing is absolutely amazing. 

Tonight, watching an episode of "White Collar" from season five, I heard a snippet of a song that Mozzie was listening to. It took less then thirty seconds to find the song through an internet search. I thought it was Japanese -- it wasn't -- it was French.

Link here.