Intel faces gloomy business outlook, despite revealing innovations

Intel CEO Bob Swan has revealed a gloomy business outlook, despite its chief engineering officer Murthy Renduchintala tried to offer innovations.
Intel
Intel presented a three-year financial plan to achieve 2021 total revenue between $76 billion and $78 billion while growing free cash flow and reducing spending. The company aims to achieve $85 billion in total revenue by 2022-2023.

The technology company said on Wednesday it expects to have 28 percent market share by 2023, or about $85 billion in sales in a $300 billion addressable market for the chips it makes, according to the company’s forecast.

Bob Swan said the company sees both revenue and earnings per share growing in the single digit percentage range over the next three years, with flat PC chip sales offset by double digit percentage revenue growth in data center chips.

Swan also said operating margins would remain relatively steady at 32 percent, but that gross margins would decline as the company ramps up its 10-nanometer chip-making technology, which makes chips faster by making their features smaller.

Intel has struggled with delays for its 10-nanometer technology, losing its lead in making the smallest chips to rival Taiwan Semiconductor Manufacturing (TSMC). Intel plans to launch 10nm chips for high-end PCs later this year, and for servers early next year.

Intel once dominated the most important chip market with more than 90 percent share for the brains of personal computers. As PC sales have stagnated, it has expanded into data center processors, memory and networking chips, Reuters reported.

Innovations

Intel said it will start shipping its volume 10nm client processor in June and shared first details on the 7nm process technology.

Intel’s Data Center Group expects to bring a new Intel Xeon product every four to five quarters with plans to ship a 10nm-based Ice Lake server CPU in the first half of 2020.

Intel will bring Tiger Lake, a 10nm-based CPU in 2020 that will feature a new CPU core architecture.

Intel is planning several 10nm-based products in 2019 and 2020. Intel’s 7nm process is well underway. Intel’s first 7nm-based product, an Intel Xe Architecture-based GP-GPU for data center artificial intelligence (AI) and high-performance computing (HPC), is expected to launch in 2021.

The Ice Lake platform is expected to deliver approximately 3 times faster wireless speeds, 2 times faster video transcode speeds, 2 times faster graphics performance, and 2.5 to 3 times faster artificial intelligence (AI) performance over previous generation products.

Ice Lake-based devices from Intel partners will be on shelves for the 2019 holiday season. Intel plans to launch multiple 10nm products across the portfolio through 2019 and 2020, including additional CPUs for client and server, the Intel Agilex family of FPGAs, the Intel Nervana NNP-I (AI inference processor), a general-purpose GPU and the Snow Ridge 5G-ready network system-on-chip (SOC).

Intel’s 7nm process technology that will deliver 2 times scaling and is expected to provide approximately 20 percent increase in performance per watt with a 4 times reduction in design rule complexity. The 7nm general purpose GPU is expected to launch in 2021.

Lakefield is projected to deliver approximately 10 times SOC standby power improvement and 1.5 to 2 times active SOC power improvement relative to 14nm predecessors, 2 times graphics performance increases, and 2 times reduction in printed-circuit-board (PCB) area, enabling OEMs to have more flexibility for thin and light form factor designs.

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