On April 26th Beijing time, Intel released its first quarter financial report. Under GAAP (General Accounting Standards), the total revenue for the first quarter of 2024 was $12.7 billion, a year-on-year increase of 8.6%, and the net profit loss was $380 million, a significant narrowing of the loss compared to last year. Both data are basically in line with market expectations.
Intel expects its revenue to be between $12.5 billion and $13.5 billion in the second quarter of 2024. Intel's Chief Financial Officer David Zinner said, "We expect revenue and non GAAP earnings per share to achieve year-on-year growth in the 2024 fiscal year, including an increase of approximately 200 basis points in gross profit margin for the year."
It is worth noting that this is the first report of Intel's wafer foundry business after being "independent" and adopting a new financial structure.
The new financial report is mainly divided into three business lines. Firstly, Intel wafer foundry has become a new operating department, including foundry technology development, foundry manufacturing and supply chain, and foundry services; The second is Intel's product division, which consists of three business units: Client Computing Division (CCG), Data Center and Artificial Intelligence Division (DCAI), and Network and Edge Division (NEX); The third is other businesses, including the independently operated FGPA company Altera and the independently listed Mobileye.
Specifically, in terms of performance, Intel's product division achieved a total revenue of $11.9 billion in the first quarter, a year-on-year increase of 17%. Among them, the revenue of the Client Computing Division was 7.5 billion US dollars, a year-on-year increase of 31%; The revenue of the data center and artificial intelligence business unit was 3 billion US dollars, a year-on-year increase of 5%; Network and edge revenue reached $1.4 billion, a year-on-year decrease of 8%.
During the period, Intel's wafer foundry division generated revenue of $4.4 billion, a year-on-year decrease of 10%, and incurred an operating loss of $2.5 billion. Intel has previously stated that from now until the end of 2030, Intel OEM is working hard to achieve a breakeven operating profit margin. Operating losses are expected to peak in 2024, with a goal of achieving a gross profit margin of 40% and an operating profit margin of 30% by the end of 2030.
From the above data, it can be seen that on the one hand, computer processors (client computing business unit) currently account for the highest proportion of revenue, and the overall environment of year-on-year growth is the recovery of the PC market. According to the latest report from IDC, the global traditional personal computer market resumed growth in the first quarter of 2024 after two years of decline. The global PC shipment volume reached 59.8 million units in the quarter, a year-on-year increase of 1.5%.
Intel has recently released the Gaudi 3 AI accelerator on data center AI chips to benchmark against Nvidia. The competition in the AI field is very fierce, and the outside world is also watching how Intel's new AI products will bring new growth. Currently, companies such as NAVER, Dell Technologies, Bosch, and AMD plan to use the Gaudi 3 AI accelerator.
On the other hand, Intel's OEM business is still in its investment phase and aims to complete the "four years and five process nodes" plan by 2025, which is also Intel's future bet.
Intel stated that Intel 7, Intel 4, and Intel 3 have achieved mass production; Intel 20A will begin production in the second half of 2024 with Arrow Lake; Intel 18A is expected to release version 1.0 of the PDK (Process Design Kit) in the second quarter of 2024, and production will begin in the first half of 2025 with Clearwater Forest and Panther Lake.
According to current disclosures, six external customers, including Microsoft, have promised to use Intel 18A process nodes for OEM manufacturing. At the same time, the financial report also released Intel's process roadmap after "four years and five process nodes", and Intel 14A will be the next advanced process node after Intel 18A.
Currently, Intel is facing new challenges and competitions in the fields of contract manufacturing, data centers, and PCs.