Intel announced its financial results for the first quarter of 2023 on Thursday, reporting revenue of $11.7 billion, a sharp decline of 36%, which is the fifth consecutive quarter of revenue decline. The reason is that the demand for semiconductors or chips needed for PCs and smartphones has dropped significantly.
Q1 analysis
In the first quarter, PC-centric Customer Computing Group (CCG) revenue was $5.8 billion, down 38% year-over-year, Data Center and Artificial Intelligence Group (DCAI) revenue was $3.7 billion, down 39% year-over-year, Network and Edge Computing Group (NEX) revenue was $1.5 billion, down 30% year-over-year, and Intel Foundry Services (IFS) revenue was $118 million, down 24% year-over-year. Only Mobileye, the autonomous driving unit, saw a 16% year-over-year increase in revenue to $458 million.
Intel's Customer Computing Group, which is responsible for Intel's CPUs, GPUs and other PC components, attributed the division's decline in revenue to declining PC demand and OEMs' focus on clearing existing Intel component inventories.
On a GAAP basis, the company's first-quarter net loss of $2.8 billion was the company's second consecutive quarter of losses and the company's largest quarterly loss ever, turning into a loss year-on-year compared to a net profit of $8.1 billion in the same period last year, and a loss per share of $0.66, compared to earnings per share of $1.98 in the same period last year.
On a non-GAAP basis, the company reported a net loss of $200 million in the first quarter, compared with a net profit of $3.6 billion in the year-ago quarter, and a loss of $0.04 per share, compared to earnings per share of $0.87 in the year-ago quarter.
Q2 forecast
Intel expects second-quarter 2023 revenue to be in the range of $11.5 billion to $12.5 billion, broadly in line with analysts' expectations. On a GAAP basis, the loss per diluted share was 0.62 cents, and on a non-GAAP basis, it was a loss per diluted share of $0.04.
Intel CEO Pat Gelsinger said that in the first quarter, the company's share of the overall PC market increased. He expects the PC business to improve later this year, as the company ramps up production of the next-generation CPU, codenamed Meteor Lake, which will be launched in the second half of 2023.
He also said that the company expects a "modest recovery" in the second half of the year as the PC market improves and the outlook for data centers brightens.