Will Intel ever go out of business?

Problems with new technology: Data center business gives Intel a big boost

Santa Clara (dpa) - The expansion of data centers during the Corona crisis gave the chip giant Intel a strong boost in the past quarter. Consolidated sales rose 20 percent year-on-year to $ 19.7 billion (EUR 16.9 billion).

The data center business shot up 43 percent to $ 7.1 billion. The corona crisis had made it necessary to expand network capacities due to the relocation to the home office and the increased use of streaming services. The need for chips for it is now decreasing again, said Intel's CFO George Davis.

At the same time, more notebooks for home work have been bought in recent months. Intel profited from it with a sales increase of seven percent to 9.5 billion dollars in its computer chip division. At the same time, the group had to postpone the introduction of a new generation of chips for another six months. The Intel share lost more than ten percent in after-hours trading.

The processors with structure widths of 7 nanometers are now expected to come into the first computers at the end of 2022, said Intel boss Bob Swan. That would be a year later than originally planned. The smaller the structure widths, the more processors fit on a semiconductor wafer during production. In addition, the chips work more efficiently and save more electricity.

The problem with Intel's 7 nanometer production is that it sheds too many unusable chips. In chip production, low error rates are important in order to be able to work at a profit. Intel has now found the causes of the problem and is eliminating them.

At Intel, the transition to 10-nanometer technology, which the company is now relying on for the near future, has already been delayed. The smaller competitor AMD and its production partners are already producing 7-nanometer chips. According to Intel's quarterly report, AMD shares rose by almost eight percent. Unlike AMD and various other chip companies, Intel relies on its own production instead of outsourcing it to specialized providers.

The renewed delay at Intel also sheds new light on Apple's recent decision to replace the group's processors in its Mac computers with chips from its own development. In the past, Apple repeatedly had to slow down the renewal of its model range because the required Intel processors were not available.

Despite the problems, Swan was confident about the future. In addition to the main processors, there were more and more Intel semiconductors in various devices, he emphasized. The market is big: "We see a world in which basically everything becomes a computer." And Intel will be geared towards growth.

An important building block for this is the acquired company Mobileye, which offers car manufacturers equipment for driver assistance systems and is working on technology for autonomous driving. In the past quarter, however, Mobileye sales fell by 27 percent to $ 146 million due to ailing auto sales.

The bottom line is that Intel made a quarterly profit of $ 5.1 billion - 22 percent more than a year earlier. However, the sales forecast for the rest of the year fell short of analysts' expectations.

© dpa-infocom, dpa: 200724-99-905697 / 2

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