Intel loses $500 million in Q2 2022, cites ‘sudden and rapid decline in economic activity’
Intel reported its first loss in decades, due in part to its Accelerated Computing Systems and Graphics Group losing $507 in Q2 2022.
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Intel posteda loss of $500 million in Q2 2022. This marked the first quarterly loss that the company has seen in decades as highlighted byTom’s Hardware. The company saw revenue drops in its Client Computing Group (own 25%), Datacenter and AI Group (down 16%), and Intel Foundry Services (down 54%). Intel’s overall revenue, gross margin, operating margin, net income, and earnings per share all went down as well when compared to Q2 2021.
Intel CEO Pat Gelsinger pointed to several factors that contributed to the loss, including internal and external factors.
“This quarter’s results were below the standards we have set for the company and our shareholders. We must and will do better. The sudden and rapid decline in economic activity was the largest driver, but the shortfall also reflects our own execution issues,” said Gelsinger. “We are being responsive to changing business conditions, working closely with our customers while remaining laser-focused on our strategy and long-term opportunities. We are embracing this challenging environment to accelerate our transformation.”
The CEO also highlighted that theCHIPS act, which recently passed the U.S. Senate, will soon be enacted. That legislation would see billions of dollars granted to chip makers, including Intel.
Intel’s Accelerated Computing Systems and Graphics Group lost $507 million in Q2 2022. It saw sales of $186 million, which was not enough to record a positive revenue. Intel’s Arc Alchemist GPUs have only launched in China, thoughPC Gamernotes that even a timely launch of the graphics likely would not have overcome the company’s losses.
Intel had to lower its expectations for its Accelerated Computing Systems and Graphics Group. The company explained that it will “not hit [its] GPU unit target.”
Despite the poor quarter, Gelsinger shared a positive outlet regarding Intel Arc graphics. “We remain on track to deliver over $1 billion in revenue this year. In Q2, we started to ramp Intel Arc graphics for laptops and OEMs, including Samsung, Lenovo, Acer, HP and Asus…. Intel Arc A5 and A7 desktop cards will start to ship in Q3.”
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While Intel Foundry Services revenue was down 54%, things could change in the near future.Intel just announcedthat MediaTek, one of the world’s largest chip designers, will use Intel Foundry Services to manufacture chips for a range of devices.
Intel projects revenue between $15 billion and $16 billion for Q3 2022, which is much lower than the $19.2 billion the company brought in during the same quarter of last year. The tech giant expects gross margins of 43.2% in the quarter, which would mark a dip of 56% compared to the previous year.
“We are being responsive to changing business conditions, working closely with our customers while remaining laser-focused on our strategy and long-term opportunities,” said Gelsinger. “We are embracing this challenging environment to accelerate our transformation.”
Intel projects revenue of $65-$68 billion for all of 2022, which is between $8-$11 billion lower than first expected.
Sean Endicott is a tech journalist at Windows Central, specializing in Windows, Microsoft software, AI, and PCs. He’s covered major launches, from Windows 10 and 11 to the rise of AI tools like ChatGPT. Sean’s journey began with the Lumia 740, leading to strong ties with app developers. Outside writing, he coaches American football, utilizing Microsoft services to manage his team. He studied broadcast journalism at Nottingham Trent University and is active on X @SeanEndicott_ and Threads @sean_endicott_.
