Intel Falls Short of Wall Street Expectations in Q3 Amid Decline in PC Shipments

Intel CEO Pat Gelsinger (Photo by CNBC)

[Asia Economy Reporter Yujin Cho] American semiconductor company Intel reported third-quarter results that fell short of market expectations due to a decline in PC shipments.

On the 21st (local time), according to the Wall Street Journal (WSJ) and CNBC, Intel announced that its third-quarter revenue this year was $19.2 billion (approximately 22.608 trillion KRW), a 5% increase compared to the same period last year.

Excluding the NAND flash business unit sold to SK Hynix, revenue was $18.1 billion, falling short of Wall Street's estimate of $18.2 billion.

Net profit was $6.8 billion, a 60% increase compared to $4.3 billion in the same period last year.

The market attributed the revenue shortfall to a decrease in PC shipments. The revenue of Intel's largest business unit, the Client Computing Group, was $9.7 billion, down 2% year-over-year.

Morgan Stanley analysts analyzed, "PC demand remains fairly robust, but supply constraints on some components, including power management chips, caused the entire related business unit to underperform."

CEO Pat Gelsinger forecasted that while the trend of increasing PC demand will continue, the global semiconductor shortage will not end until 2023.

CEO Gelsinger said, "We are currently in the worst situation," and "Although performance will gradually improve quarter by quarter next year, the supply-demand imbalance will not improve until 2023."

He also stated that Intel is cooperating with the automotive industry, which has been hit hard by the current supply shortage, and plans to dedicate one of its factories in Ireland to the production of automotive semiconductor chips.

Earlier, Intel announced plans to invest up to $95 billion (approximately 110 trillion KRW) over 10 years in Europe to build two new semiconductor factories in response to the global semiconductor shortage. Additionally, it has begun construction of two foundry plants in Arizona, USA, with an investment of $20 billion.

Rival company and the world's number one foundry, Taiwan's TSMC, also announced plans this month to build a new chip factory in Japan, and Samsung Electronics and Micron Technology have stated their intentions to significantly expand production capacity.

However, WSJ forecasts that it will take about two years for Intel and TSMC to operate their new semiconductor factories.

Intel projected fourth-quarter revenue of $19.2 billion, slightly below Wall Street's estimate of $19.4 billion. The annual revenue forecast was $77.7 billion.

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