In its most recent financial report, Intel recorded a revenue decline of 22%, which resulted in a loss of USD 454 million.
In the Q2 financial report for the 2022 fiscal year, Intel's revenue fell 22% to USD 15.3 billion. While the loss figure of USD 454 million is a very large decrease compared to the same period in 2021 ago, where Intel recorded a profit of USD 5 billion.
According to Intel, this decline was caused by weaker demand for PCs and their components due to a decline in economic activity. This decline feels very drastic because in recent years, the computer business has experienced a drastic increase, as quoted from Techspot, Tuesday (2/8/2022).
The increase comes because of the pandemic, where many people are buying computers to work at home. This makes many technology companies record profits. But now that golden age is over, and Intel predicts the PC market will shrink by 10% in 2022.
For Intel, this condition may be more severe because they have to bear the increasing production costs. As a result, they have announced their plans to increase the price of many of their chips, starting with processors, WiFi chips, and various other chips.
The increase in Intel chip prices may only have an impact in Q4, where Intel CFO David Zinsner said they are currently experiencing losses due to rising production costs, so these costs must be passed on to consumers.
If Intel's financial statements are broken down, revenue from the Client Computing Group -- consumer-class processors are in it -- has decreased revenue by 25% year over year, but still recorded a profit of USD 1.1 billion.
Intel CEO Pat Gelsinger claims that one of its biggest customers is reducing its stock by a very large amount, even the largest in the past decade. The biggest market decline occurred in the consumer and education-class PC sectors, resulting in a large decline in demand for processors.
Meanwhile, the Accelerated Computing Systems and Graphics Group division suffered a loss of USD 507 million in Q2. Gelsinger believes that Intel will not be able to meet its target of selling 4 million Arc GPUs this year, and complained about internal problems they experienced while developing drivers for the GPUs.
"We thought we could handle the integrated graphics software stack, and it just didn't have the level of performance, insufficient game compatibility, which we desperately needed," he explained.
Intel also confirmed that it would close its Optane memory business, and stop the development of 3D Xpoint technology. Previously, Intel had already sold its SSD division to SK Hynix, but they still kept the Optane business.
Lastly, Intel is also selling off its drone business, including 9000 drones for big shows like the Olympics and Super Bowl. The division was reportedly bought by Kimbal, brother of Elon Musk.