Intel has recently struggled to release its more advanced chip architectures, but that could change soon. CEO Pat Gelsinger today announced during Intel’s second quarter earnings call that “7nm is progressing well,” and the company is preparing to announce news on how it is “stepping up its annual pace innovation with new advances in semiconductor processing and packaging, ”during a webcast on Monday, July 26.
The announcement comes with Intel’s second-quarter results, where the semiconductor company managed to beat expectations and generate $ 18.2 billion in revenue, up 2% year-on-year. Intel is also quite optimistic about the future. He raised his outlook for 2021 by an additional $ 73.5 billion to $ 73.5 billion, and now expects year-over-year revenue growth from 2020.
Intel’s profits have trended higher in recent quarters, despite frequent delays and lapses in the production of its 10nm and 7nm chips. This growth has been supported by spikes in demand for personal computers and data center chips in 2020 due to the COVID-19 pandemic, which has seen millions of people purchase new laptops and computers to facilitate the distance work and education and increased reliance on cloud services.
And Intel still appears to be riding this wave, recording $ 10.1 billion in revenue for its IT client group (up 6% year-on-year and a second-quarter record for the company), despite the global shortage of semi -conductors. Gelsinger commented on the call that he “expects[s] shortages hit bottom in second half [of the year, but] it will take another one to two years before the industry is able to fully catch up with demand.
The boost from the client IT group also helped Intel offset weaker revenue at its data center group, which was down 9% year-over-year with revenue of $ 6.5 billion. However, there are signs that the impressive growth of the PC segment is starting to slow: IDC and Gartner both noted that PC sales growth slowed significantly in the second quarter, which could indicate that the increase in sales will decline in the coming months. .
The past year has been tumultuous for Intel. Last summer, the company was forced to admit that it would significantly delay its upcoming 7nm architecture for its next generation of processors. This was followed by the departure of the company’s chief hardware officer, Dr Venkata (Murthy) Renduchintala, and the replacement of CEO Bob Swan by Pat Gelsinger (former head of the technology bureau and hardware engineer at the company) in order to straighten the boat.
Gelsinger wasted no time trying to make changes to get Intel back on track, announcing a new “IDM 2.0” initiative in March that aims to see Intel return as an industry leader in manufacturing. of chips. As part of the plan, the company will outsource the production of “products at the heart of Intel’s IT offerings” to competitors like TSMC and Samsung from 2023.
Intel is also working on launching a new branch of its business, Intel Foundry Services, which will see the company undertake manufacturing projects for third-party companies, including a $ 20 billion investment in expanding its manufacturing facilities. in Arizona.
With the overwhelming demand for more chipmaking companies in light of the global semiconductor shortage, Intel Foundry Services could be a big win for the company down the line. Intel announced today that it has more than 100 potential customers interested in the service and promised more information on the new initiative on Monday, but it will still be some time before this business escalates.