[Overseas Stocks Spotlight] "Intel, 7nm Mass Production Delay... Renewed Concerns Over Widening Technology Gap"

[Asia Economy Reporter Eunmo Koo] Intel (INTC US) posted better-than-expected results in the second quarter of this year, driven by demand from its Data Center Group and PC segments. However, concerns about a widening technology gap have resurfaced as the launch of its next-generation 7-nanometer (nm) product lineup has been delayed by six months due to yield issues.

Intel reported second-quarter revenue of $19.7 billion and operating income of $5.7 billion, exceeding consensus estimates by 6% and 3%, respectively. Revenue from the Data Centric business grew 34% year-over-year, while the PC Centric segment increased by 7%. Continued cloud demand led to a 43% year-over-year increase in revenue for the Data Center Group.

With better-than-expected first-half results, Intel raised its full-year revenue guidance by 2% ($1.5 billion) to $75 billion. However, its third-quarter revenue guidance of $18.2 billion represents a 5% decline year-over-year, and earnings per share (EPS) guidance of $1.10 is down 22%, slightly missing expectations. Dongwon Kim, a researcher at KB Securities, noted in a report that “while momentum in cloud and notebook demand continues, desktop PCs, Internet of Things (IoT), and automotive demand are expected to remain weak. Traditionally, Intel has shown a pattern of stronger first-half and weaker second-half results, but this year is expected to show the opposite, with EPS declining 4.5% compared to last year.”

Concerns about product competitiveness have reignited. Despite generally positive earnings and guidance, Intel’s stock price fell more than 10% in after-hours trading as worries about new products resurfaced. Junho Moon, a researcher at Samsung Securities, explained, “Intel confirmed that its 10nm process CPUs, which have been delayed multiple times, will be released for server products (Ice Lake) by the end of the year. However, the 7nm process roadmap is expected to be delayed by six months due to yield issues compared to the original target. This contrasts with TSMC’s commencement of 5nm process product production and has raised concerns about a widening technology gap with AMD.”

This content was produced with the assistance of AI translation services.