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Intel Earnings Q4 2021

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Contents

Q4 2021 Financials

  • Revenue: US$ 19.5 Billion (+4% YoY)

    • CCG: US$ 10.1 Billion (-7% YoY)
    • DCG: US$ 7.3 Billion (+20% YoY)
    • PSG: US$ 484 Million (+15% YoY)
    • NSG: US$ 1.0 Billion (-18% YoY)
    • IOTG: US$ 1.1 Billion (+36% YoY)
    • MBLY: US$ 356 Million (+7% YoY)

  • Income: US$ 4.5 Billion (-21% YoY)

  • Gross Margin: 55.4%

  • Operating Margin: 25.9%

  • Research & Development, Mergers & Acquisitions Expenditure: US$ 5.8 Billion (+11% YoY)

Group-Specific Comments

  • CCG:
    • Lower Revenue on Ecosystem Constraints & Modern Ramp Down
    • Lower Income on Reduced Reserve Sell-Through
  • DCG:
    • Record Revenue on Record Enterprise Demand
    • Lower Income on One-time Federal Charge & 10nm Mix
      • Have not ramped a new node for Data Center in five years
  • IOTG:
    • Record Revenue on COVID Recovery Demand
  • MBLY:
    • Higher Revenue on Increased Global Vehicle Production

2021 Financials

  • Revenue: US$ 74.7 Billion (+2% YoY)

    • CCG: US$ 40.5 Billion (+1% YoY)
    • DCG: US$ 25.8 Billion (-1% YoY)
    • PSG: US$ 1.9 Billion (+4% YoY)
    • NSG: US$ 4.3 Billion (-20% YoY)
    • IOTG: US$ 4.0 Billion (+43% YoY)
    • MBLY: US$ 1.3 Billion (+33% YoY)

  • Income: US$ 22.4 Billion (+4% YoY)

  • Gross Margin: 57.7%

  • Operating Margin: 33.4%

  • Free Cash Flow: US$ 11.3 Billion

  • Research & Development, Mergers & Acquisitions Expenditure: US$ 20.9 Billion (+10% YoY)

Q1 2022 Outlook

  • Revenue: US$ 18.3 Billion (-1% YoY)
  • Gross Margin: 52%

Client Computing

  • Growth due to:

    • Higher PC Density
    • Shorter Replacement Cycles
    • Increased Market Penetration

  • New Overclocking Records in Mobile Gaming [This doesn’t matter…]

  • Third-Generation Intel Evo Platform (Announced at CES)

  • Structurally Larger Market in 2022

  • Inventory Levels returning to Normal

  • Managing Significant Supply Constraints

  • Strong Upgrade Cycle Induced by Windows 11

Data Center

  • Xeon Shipments in Q4 exceeded total server CPU shipments of any competitor

  • More than 1 Million Ice Lake Xeon Shipments (Equal to the Previous 3 Quarters Combined)

  • Initial Sapphire Rapids Shipments in Q1 2022

    • Targeting 30× Performance across a range of workloads, including AI

  • New Kestrel Supercomputer for the Department of Energy

    • Built by HPE
    • Sapphire Rapids
    • 44 PetaFLOPS
    • Completed in 2023

  • Expected Growth due to Higher Hyperscaler Capital Expenditure

  • Ice Lake is more competitive and Sapphire Rapids will be even more competitive

  • Back-and-forth between Intel and competitors for the crown

HPC

  • 100 HPC Applications running on Ponte Vecchio through oneAPI
  • Working to deploy HPC-Tuned CPUs and GPUs with:
    • Atos
    • Dell
    • HPE
    • Lenovo
    • Quanta
    • Supermicro

Edge

  • OpenVINO used in Factory & Medical Environments by:
    • BMW Group
    • Samsung

Networking

  • Xeon & FlexRAN used for majority of vRAN Deployments

Process Technology

  • Intel 7 Shipments in Volume

  • Intel 4, 3, 20A & 18A remain on or ahead of schedule

  • Aggressively Ramping 10nm

  • Starting to Ramp Cost of Intel 7 and 4

  • 30% reduction in 10nm wafer costs YoY

  • Record quarterly increase in substrate capacity

  • Record Number of PDK Releases

  • Record number of Product Releases

  • Deepened ASML Partnership with the second-generation of High-NA EUV

  • Multiple Long-term Agreements with:

    • Foundry Partners
    • Substrate Suppliers
    • Equipment Suppliers

Fabrication Facilities

  • Arizona Ground Broken 3 months ahead of schedule

  • Ohio Fab Announcement

    • Will be bigger if CHIPS Act is passed, but not solely dependent on it

  • Both will produce Internal and External (Intel Foundry Services) Products

Capital Expenditure

  • 2021 Statistics:

    • 60% Equipment
    • 40% Building Shells

  • Builds Fab Shells in 2022 and 2023

  • Fill with Equipment in 2024 and 2025

IEDM

  • Outlined Path to:
    • 10× Density Improvement in Packaging
    • 30-50% Area Improvement in Transistor Scaling

Intel Foundry Services

  • Strong Pipeline of Potential Customers

  • IP Development with Ecosystem going well

  • RibbonFET and PowerVIA are enticing to potential customers

  • 18A PDK Released to 3 RAMP-C Customers (IBM, Qualcomm and ???)

  • Intel 16 Customers’ Products Ramping in 2023

  • First Foundry Revenue Units from Intel 16 Customers in 2023

  • Intel 3 Revenue Contributions in 2024

  • Intel 18A Revenue Contributions in 2025 and beyond

  • Lower Range of Margins within Intel (Combined with Higher End of Leadership Products)

Mobileye

  • 100 Million EyeQ SoC Shipments

  • Sneak Peak of EyeQ Ultra at CES

  • Introduced Autonomous On-Demand Service in Paris

  • Expected Launches of Robotaxis in Munich and Tel Aviv in 2022

  • Intent to take Mobileye public in mid-2022

Supply Chain & Shortages

  • Shortages to persist through 2022 and into 2023
  • Affects Specialties, Substrate & Third-party Silicon

Other

  • First Close of Sale of Solidigm/NAND Business

  • 50th Anniversary of Intel 4004

  • Habana Instances Available at AWS (EC2 DL1)

  • oneAPI 2022 Release

  • Alchemist Shipments to over 50 OEMs and ODMs

  • Collaboration on FPGA-based IPU Solutions with:

    • Inspur
    • Ruijie Networks
    • Silicom

  • [Dodged Question on Altera Spin-Off]

Revenue Segments

  • Client Computing: CCG + Workstation
  • Data Center & AI: Data Center CPUs + PSG
  • Networking and Edge: IOTG + Data Center Networking Products
  • Accelerated Computing & Graphics: Discrete Graphics Products
  • Mobileye
  • Intel Foundry Services: Wafer & Packaging Offerings

Legend

  • CCG: Client Computing Group
  • DCG: Data Center Group
  • PSG: Programmable Solutions Group
  • NSG: Networking Solutions Group
  • IOTG: Internet of Things Group
  • MBLY: Mobileye

References