Intel increases Q2 sales by 20 percent, announces 7nm products delay

Intel just revealed its powerful lineup of H-series processors
Image: Intel

Intel posted its second-quarter financial results on Thursday and revealed it beat its revenue intake by 20 percent year-over-year. The chipmaker managed to exceed Wall Street’s earnings expectations because of a huge spike in data center sales.

However, the brand also announced the release of its 7nm products would be delayed due to manufacturing problems.

Intel’s Near $20 billion Q2 Performance

In the period previous, Intel generated $19.7 billion in revenue and net income of $5.3 billion with earnings per share (EPS) of $1.23. In addition to topping its Q2 2019 earnings, the firm also beat Refinitiv’s consensus estimate of $18.55 billion in sales with adjusted EPS of $1.11.

Like many chipmakers, Intel experienced a surge in purchases related to the coronavirus pandemic. Web service providers bought the firm’s components to acclimate to major increases in usage. Employees and students bought new PCs and CPUs to facilitate working from home. As a result, the company’s Q2 data center gross income jumped to $7.11 billion, up 34 percent from 2019, while its PC-centric revenue amounted to $9.5 billion, a year-over-year improvement of 7 percent.

Intel also offered a mixed forecast for its near and medium-term outlook.

On the bright side, the firm estimates $75 billion in sales with adjusted EPS of $4.85 for full-year 2020. Market analysts pegged the company’s annual revenue at $73.86 billion and its adjusted EPS at $4.81. The microelectronics brand expects to generate $18.2 billion in sales in Q3 with $1.10 in adjusted EPS, which surpasses Refinitiv’s revenue forecast by 1.6 percent, but falls short of its EPS prediction by 3.5 percent.

Intel’s 7nm Processors will not be Available Until 2022 or 2023

Intel also made a major production disclosure when posting its Q2 earnings results. The company revealed its 7nm process is not yielding the anticipated amount of useable nodes. Consequently, the brand explained the launch of its next-generation CPU products would be delayed by approximately six months.

In an investor call, CEO Bob Swan said Intel’s first 7nm processor shipments would occur in late 2022 or early 2023. The executive said his firm would accelerate its production of 10nm nodes to compensate for the delay. Swan also noted the chipmaker would consider utilizing “an external foundry” to meet its customer commitments.

Following its Q2 results and 7nm announcements, Intel’s stock fell by as much as 18 percent, reports Bloomberg.

Although the Santa Clara, California-based brand’s status update roiled investors, it might lead to a much-needed change. In the microprocessor field, technological advancement is everything, and manufacturing is an ongoing challenge for Intel. The company stated its 10nm products would be ready in 2017,  but the firm just entered volume production this year.

The chipmaker could stabilize its business by outsourcing manufacturing to another brand while it focuses on design. That strategy proved very fruitful for AMD. And a market leader in advanced node production recently said it would open a $12 billion factory in Arizona. For Intel, becoming a fabless semiconductor company could be a majority positive turning point.


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