Quarterly results from the world’s largest chipmaker say more about the PC industry than the semiconductor industry. For its March quarter, Intel Corp.’s profit declined by 25 percent from the year-ago period to $2.05 billion. Revenue in the first quarter slipped to $12.58 billion, versus $12.91 billion in the first quarter of 2012.
Click here to access an 8-minute video with Dale Ford, vice president of Electroncis Supply Chain Research at IHS, who offers analysis of Intel results and the prospects for the company in the coming months.
"Amidst market softness, Intel performed well in the first quarter and I'm excited about what lies ahead for the company," said Paul Otellini, Intel president and CEO, in a statement. "We shipped our next generation PC microprocessors, introduced a new family of products for micro-servers and will ship our new tablet and smartphone microprocessors this quarter. We are working with our customers to introduce innovative new products across multiple operating systems. The transition to 14nm technology this year will significantly increase the value provided by Intel architecture and process technology for our customers and in the marketplace."
The shift in the chip market toward tablets and smartphones is evident in the changing fortunes of Intel. Although its high-end chip sales to the server market is growing, it’s not enough to offset weakness in PCs. Intel’s data center group reported a 7 percent increase in revenue in the quarter, to $2.6 billion; in 2012, the company’s PC chip division accounted for 64 percent of Intel’s total revenue and 89 percent of its operating income.
The shift by consumers to tablet computers and smartphones is a big part of Intel’s problem, analysts said, but so was the lack of early buying of personal computers running Microsoft’s new operating system, Windows 8.
