Intel Announces Q3 2014: Mucho Dinero

Subject: Editorial | October 15, 2014 - 12:39 PM |
Tagged: revenue, Results, quarterly, Q3, Intel, haswell, Broadwell, arm, amd, 22nm, 2014, 14nm

Yesterday Intel released their latest quarterly numbers, and they were pretty spectacular.  Some serious milestones were reached last quarter, much to the dismay of Intel’s competitors.  Not everything is good with the results, but the overall quarter was a record one for Intel.  The company reported revenues of $14.55 billion dollars with a net income of $3.31 billion.  This is the highest revenue for a quarter in the history of Intel.  This also is the first quarter in which Intel has shipped 100 million processors.

The death of the PC has obviously been overstated as the PC group had revenue of around $9 billion.  The Data Center group also had a very strong quarter with revenues in the $3.7 billion range.  These two groups lean heavily on Intel’s 22 nm TriGate process, which is still industry leading.  The latest Haswell based processors are around 10% of shipping units so far.  The ramp up for these products has been pretty impressive.  Intel’s newest group, the Internet of Things, has revenues that shrank by around 2% quarter over quarter, but it has grown by around 14% year over year.

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Not all news is good news though.  Intel is trying desperately to get into the tablet and handheld markets, and so far has had little traction.  The group reported revenues in the $1 million range.  Unfortunately, that $1 million is offset by about $1 billion in losses.  This year has seen an overall loss for mobile in the $3 billion range.  While Intel arguably has the best and most efficient process for mobile processors, it is having a hard time breaking into this ARM dominated area.  There are many factors involved here.  First off there are more than a handful of strong competitors working directly against Intel to keep them out of the market.  Secondly x86 processors do not have the software library or support that ARM has in this very dynamic and fast growing section.  We also must consider that while Intel has the best overall process, x86 processors are really only now achieving parity in power/performance ratios.  Intel still is considered a newcomer in this market with their 3D graphics support.

Intel is quite happy to take this loss as long as they can achieve some kind of foothold in this market.  Mobile is the future, and while there will always be the need for a PC (who does heavy duty photo editing, video editing, and immersive gaming on a mobile platform?) the mobile market will be driving revenues from here on out.  Intel absolutely needs to have a presence here if they wish to be a leader at driving technologies in this very important market.  Intel is essentially giving away their chips to get into phones and tablets, and eventually this will pave the way towards a greater adoption.  There are still hurdles involved, especially on the software side, but Intel is working hard with developers and Google to make sure support is there.  Intel is likely bracing themselves for a new generation of 20 nm and 16 nm FinFET ARM based products that will start showing up in the next nine months.  The past several years has seen Intel push mobile up to high priority in terms of process technology.  Previously these low power, low cost parts were relegated to an N+1 process technology from Intel, but with the strong competition from ARM licensees and pure-play foundries Intel can no longer afford that.  We will likely see 14 nm mobile parts from Intel sooner as opposed to later.

Intel has certainly shored up a lot of their weaknesses over the past few years.  Their integrated 3D/GPU support has improved in leaps and bounds over the years, their IPC and power consumption with CPUs is certainly industry leading, and they continue to pound out impressive quarterly reports.  Intel is certainly firing on all cylinders at this time and the rest of the industry is struggling to keep up.  It will be interesting to see if Intel will keep up with this pace, and it will be imperative for the company to continue to push into mobile markets.  I have never counted Intel out as they have a strong workforce, a solid engineering culture, and some really amazingly smart people (except Francois… he is just slightly above average- he is a GT-R aficionado after all).

Next quarter appears to be more of the same.  Intel is expecting revenue in the $14.7 billion, plus or minus $500 million.  This continues along with the strong sales of PC and server parts for Intel that helps buoy them to these impressive results.  Net income and margins again look to appear similar to what this past quarter brought to the table.  We will see the introduction of the latest 14 nm Broadwell processors, which is an important step for Intel.  14 nm development and production has taken longer than people expected, and Intel has had to lean on their very mature 22 nm process longer than they wanted to.  This has allowed a few extra quarters for the pure-play foundries to try to catch up.  Samsung, TSMC, and GLOBALFOUNDRIES are all producing 20 nm products with a fast transition to 16/14 nm FinFET by early next year.  This is not to say that these 16/14nm FinFET products will be on par with Intel’s 14 nm process, but it at least gets them closer.  In the near term though, these changes will have very little effect on Intel and their product offerings over the next nine months.

Source: Intel

Intel Earnings Report (Q2 2014)

Subject: General Tech, Processors, Mobile | July 16, 2014 - 03:37 AM |
Tagged: quarterly results, quarterly earnings, quarterly, Intel, earnings

Another fiscal quarter brings another Intel earnings report. Once again, they are doing well for themselves as a whole but are struggling to gain a foothold in mobile. In three months, they sold 8.7 billion dollars in PC hardware, of which 3.7 billion was profit. Its mobile division, on the other hand, brought in 51 million USD in revenue, losing 1.1 billion dollars for their efforts. In all, the company is profitable -- by about 3.84 billion USD.

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One interesting metric which Intel adds to their chart, and I have yet to notice another company listing this information so prominently, is their number of employees, compared between quarters. Last year, Intel employed about 106,000 people, which increased to 106,300 two quarters ago. Between two quarters ago and this last quarter, that number dropped by 1400, to 104,900 employees, which was about 1.3% of their total workforce. There does not seem to be a reason for this decline (except for Richard Huddy, we know that he went to AMD).

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Image Credit: Anandtech

As a final note, Anandtech, when reporting on this story, added a few historical trends near the end. One which caught my attention was the process technology vs. quarter graph, demonstrating their smallest transistor size over the last thirteen-and-a-bit years. We are still slowly approaching 0nm, following an exponential curve as it approaches its asymptote. The width, however, is still fairly regular. It looks like it is getting slightly longer, but not drastically (minus the optical illusion caused by the smaller drops).

Source: Intel
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Subject: Editorial
Manufacturer: NVIDIA

It wouldn’t be February if we didn’t hear the Q4 FY14 earnings from NVIDIA!  NVIDIA does have a slightly odd way of expressing their quarters, but in the end it is all semantics.  They are not in fact living in the future, but I bet their product managers wish they could peer into the actual Q4 2014.  No, the whole FY14 thing relates back to when they made their IPO and how they started reporting.  To us mere mortals, Q4 FY14 actually represents Q4 2013.  Clear as mud?  Lord love the Securities and Exchange Commission and their rules.

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The past quarter was a pretty good one for NVIDIA.  They came away with $1.144 billion in gross revenue and had a GAAP net income of $147 million.  This beat the Street’s estimate by a pretty large margin.  As a response, trading of NVIDIA’s stock has gone up in after hours.  This has certainly been a trying year for NVIDIA and the PC market in general, but they seem to have come out on top.

NVIDIA beat estimates primarily on the strength of the PC graphics division.  Many were focusing on the apparent decline of the PC market and assumed that NVIDIA would be dragged down by lower shipments.  On the contrary, it seems as though the gaming market and add-in sales on the PC helped to solidify NVIDIA’s quarter.  We can look at a number of factors that likely contributed to this uptick for NVIDIA.

Click here to read the rest of NVIDIA's Q4 FY2014 results!