Intel has disclosed its financial results for the first quarter of 2024, showcasing robust growth across various product segments. With revenue reaching $12.7 billion, marking a 9 percent increase, the company is optimistic about its potential in the semiconductor market.
INTEL
First-quarter revenue of $12.7 billion, up 9%
Forecasting second-quarter revenue of $12.5 billion to $13.5 billion
Client Computing Group (CCG) $7.5 billion (up 31%)
Data Center and AI (DCAI) $3 billion (up 5%)
Network and Edge (NEX) $1.4 billion (down 8%)
Intel Foundry $4.4 billion (down 10%)
Altera $342 million (down 58%)
Mobileye $239 million (down 48%)
Intel is targeting revenue of $12.5-13.5 billion with gross margin of 40.2 percent in the second quarter of 2024.
Intel Products revenue surged to $11.9 billion, marking a 17 percent increase. The client business spearheaded this growth, boasting 30 percent growth, attributed to a robust product lineup and enhanced market positioning.
In the client computing domain, Intel aims to spearhead the AI PC category, leveraging its Core Ultra processors, including the upcoming releases of Meteor Lake, Lunar Lake, and Arrow Lake. The company anticipates doubling unit shipments sequentially in the second quarter, with a promising outlook for the remainder of the year.
Additionally, the Data Center and AI business contributed to the positive performance with a 5 percent growth, driven by higher Xeon average selling prices (ASPs) and increased enterprise demand. However, revenue from the Network and Edge segment experienced an 8 percent decline, due to significant setbacks in the 5G market, albeit partially offset by a 10 percent growth in network and edge markets.
Within the Data Center and AI Group, Intel released its first Intel 3 server product, Sierra Forest, and is gearing up for the launch of Granite Rapids in the third quarter. The company is optimistic about stabilizing share trends in 2024, with anticipated improvements in 2025 driven by product advancements and customer demand.
Intel’s foray into accelerated computing for data centers and cloud environments, highlighted by the Gaudi 3 launch, is expected to yield over $500 million in revenue in the latter half of 2024. Moreover, the Intel Developer Cloud platform has attracted notable clients, signaling growing traction in the market.
Addressing challenges in the Network and Edge segment, Intel notes a stabilization in business performance, with plans underway to expand Ethernet-based AI networking solutions. Additionally, the company aims to enhance its competitiveness in the foundry business by driving margin expansion and optimizing wafer pricing strategies.
During the CEO/CFO earnings call, Intel executives highlighted the expansion of Intel Products’ operating profit by over $2.1 billion, driven by increased revenue, improved inventory management, and disciplined operating spending. This resulted in an impressive operating margin of approximately 28 percent for the quarter.
Intel Foundry revenue faced a downturn, amounting to $4.4 billion, reflecting a 10 percent decrease. The decline was attributed to lower backend services and samples revenue, along with decreased sales of IMS tools. Although wafer volume slightly increased, ASPs saw a modest decline due to pricing adjustments for mature nodes.
Operating profit also took a hit, decreasing by approximately $100 million, with lower revenue partially offset by improved factory utilization. However, the operating margin declined significantly quarter-over-quarter due to higher startup costs and the conclusion of the traditional packaging business, impacting revenue.
Baburajan Kizhakedath
