News Intel 2Q24 Financial Results

[Doug S]

NAND wasn't ever a big and profitable biz for Intel.

Its also really cyclical so people could look at today and say "look at Samsung's earnings, Intel was stupid to get out of NAND" but look at Samsung's earnings in the last year or two before that and you see why it was smart for Intel to get out. They didn't have to scale to compete against the remaining behemoths in the NAND market, and Chinese suppliers are going to make things painful in the long run.

NAND is a commodity so even if western markets are somewhat protected against them via tariffs and other trade barriers that Chinese NAND is going to put pricing pressure on them and prevent the memory cartel from "agreeing but not agreeing" to cut back production at the bottom of the cycle.

 

[adroc_thurston]

That s profitable enough if it help keeping the foundries busy

Memory fabs are NOT logic fabs. Come on.

 

[Doug S]

I can't help but wonder if Apple would be smart to make some sort of PE type investment into Intel to help fund their foundry efforts - maybe with the price of formally splitting it off the main company (since Apple doesn't care about the fate of Intel's x86 business)

Apple could gain the kind of close cooperation in and knowledge of the process roadmap they have with TSMC, and if it reached the point they had caught up or surpassed TSMC they'd know in advance and could have the fabs necessary for their volume built by the time they needed it.

Unless they think Intel is going to decline even more, this might be the best time for them to jump in rescue them similar to how Apple itself was effectively rescued by an investment from Microsoft in the late 90s.

 

[misuspita]

I remember when they kept buying their own shares for so many years instead of investing... money well spent/s

I still can't decide who's the worst CEO Intel had.

 

[gdansk]

Awful, awful. And the market hates it too. But I'm not selling my INTC shares.

 

[NTMBK]

DIY stuff, not relevant.

Plenty of big customers bought Raptor Lake in big volumes. I'm sure Dell is really happy with Intel right now...

 

[adroc_thurston]

Plenty of big customers bought Raptor Lake in big volumes. I'm sure Dell is really happy with Intel right now...

Not the dying ones.
Mobile stuff like 282 seems to be unaffected.

 

[Hitman928]

FWIW, CCG (Client Computing) operating margins look decent, but Foundry + DCAI (datacenter, AI) + NEX (network, edge) + Altera (FPGA etc) + Mobileye (automated driving) seem to all be quite weak:

Q2 2024 | Operating Margin per Segment | best to worst
CCG OM: 33.7%
Mobileye: 16.4%
NEX OM: 10.3%
DCAI OM: 9.1%
Altera OM: -6.9%
Foundry OM: -65.5%
Company Total OM: -15.3%

Only on paper. Intel isn't letting the foundry charge the design groups actual fab costs so the design group margins look better than they actually are.

 

[DAPUNISHER]

Ouch -

https://twitter.com/x/status/1819102693064835247

It appears that there were yield/throughput issues on Meteor Lake, negatively impacting gross margins. When you have to get the product to your customers, and you have wafers to burn, you run it hot. I heard from OEMs that they needed more MTL, but it wasn't bone dry. You have to run hot lots in that case, or else your customers will be impacted. I didn't have this one on my dance card.

 

[NTMBK]

Not the dying ones.
Mobile stuff like 282 seems to be unaffected.

Dell own Alienware, probably the biggest single vendor of high clocked CPUs.

 

[adroc_thurston]

Dell own Alienware, probably the biggest single vendor of high clocked CPUs.

Tiny tiny tiny tiny segment of an already tiny segment of high performance desktops.

 

[desrever]

FWIW, CCG (Client Computing) operating margins look decent, but Foundry + DCAI (datacenter, AI) + NEX (network, edge) + Altera (FPGA etc) + Mobileye (automated driving) seem to all be quite weak:

Only on paper. Intel isn't letting the foundry charge the design groups actual fab costs so the design group margins look better than they actually are.

Yep, Intel is just trying to hide their poor margins in other business groups in the "foundry" business under the guise of needing more R&D in foundry. They can set w/e price they pay themselves right now so they choose to put all their loses in 1 place so everything else looks good.

It will probably only get worse from here.

 

[CakeMonster]

Americans are obsessed with dividends and put a ridiculous significance on them regardless of the company's needs or health. Buybacks have become a further perversion of that. I would absolutely expect investors to further punish Intel for the dividend suspension, even though its obviously called for in troubled times.

 

[coercitiv]

Ouch -

https://twitter.com/x/status/1819102693064835247

"All roadmaps appear to be on track."

Yeah, the same way MTL and Intel 4 was on track.

 

[Hitman928]

AMD has now basically matched Intel's DC revenue ($2.8B for AMD vs $3B for Intel). Next quarter, AMD will probably surpass Intel in DC revenue for the first time ever. Granted, a big part of this is thanks to DC GPUs, but it's still an historical moment and also kind of shows how Intel has failed to anticipate/prepare for the evolution of technology over the last decade or two.

 

[Hitman928]

Time for the company to be nimble and hungry again. The fabs will only show impact towards the end of the decade.
I'm still bullish on Intel, they have to turn from a blue whale into an orca.

If AMD can do it with a decade+ of garbage, Intel can do it.

Should it not be the case, the consumer DIY space is over... (AMD won't be selling you anything good with no competition).

I hope Intel can turn things around. I don't have faith that their current CEO can lead it.

 

[linkgoron]

I hope Intel can turn things around. I don't have faith that their current CEO can lead it.

Hopefully they bring back Raja Koduri to turn the ship around.

 

[Saylick]

"All roadmaps appear to be on track."

Yeah, the same way MTL and Intel 4 was on track.

Sure, it's on track.

Where that track leads? Who knows.

 

[poke01]

Hopefully they bring back Raja Koduri to turn the ship around.

All aboard the Titanic.

 

[Hitman928]

Intel to offer enhanced retirement packages in the coming quarters. Basically encourage the most senior (and thus highest salary) people to retire early to reduce costs.

 

[controlflow]

Pretty disastrous results. Intel is just too bloated and filled with red tape. They probably need to become leaner and cut headcount but companies in this position often struggle to get rid of the right people.

I hope Intel can turn it around and get the foundry working and the new products bring good competition to x86 again. I hope the dGPUs don't get axed during these cuts. Having another leading edge foundry and options for GPUs especially is badly needed in the market.

 

[Panino Manino]

Don't poke the lion just because it's hurt.

 

[Nothingness]

Intel to offer enhanced retirement packages in the coming quarters. Basically encourage the most senior (and thus highest salary) people to retire early to reduce costs.

And lose experience. So short sighted 😞

 

[majord]

If Pat's extreme outward /public enthusiam and confidence he constantly shows regarding the companys product releases is even close to a true reflection of how he is internally, then things are only going to get worse.

 

[controlflow]

Intel is now worth less than 100B in market cap. Basically a small mom and pop shop.