Intel, driven by demand for chips, ended 2021 with records


Laptops at an event hosted by Intel in Las Vegas on January 6, 2020 (GETTY IMAGES NORTH AMERICA/AFP/David Becker)

Intel said on Wednesday that it achieved the best quarterly and annual sales figures in its history last year, driven by strong demand for electronic chips, but the microprocessor giant is seeing its profits suffer from the heavy investments necessary to catch up with its production delay.

“2021 was dominated by unprecedented demand and supply chain difficulties,” summarized Pat Gelsinger, the boss of the American group, during a conference with analysts.

He expects demand to remain just as strong and lead to an “era of sustainable growth”, thanks to “widespread computerization”, with artificial intelligence, the “connectivity” of all objects, “computing environment” and the construction of infrastructures that allow data to be processed between servers and various sensors, without going through computers or smartphones.

The company collected $79 billion in revenue for the year, above its forecast ($77.7 billion). From October to December, it earned 20.5 billion dollars (+3% over one year), but its net profit plunged 21% to 4.6 billion.

The extreme demand for semiconductors, linked to both the digital transition and the new habits taken during the pandemic, combined with production delays due to Covid, has led to a global shortage.

It affects many sectors, as chips are essential to the manufacture of many products, from smartphones and computers, to cars and vacuum cleaners.

– Fleas on the verge of exhaustion –

Pat Gelsinger repeated that this crisis would continue until 2023, even if he foresees improvements over this period.

Intel has invested heavily in semiconductor production in the United States and Europe over the past year, with a strategy presented in March that relies on both expanding in-house manufacturing and increasing the use of subcontractors. contractors.

“The problem for the group is that the deal with the United States to build a mega-factory is very expensive, and they won’t reap the benefits until 2025,” noted the independent analyst Rob Enderle.

The Biden administration on Tuesday urged Congress to pass legislation to help US manufacturing of essential products such as semiconductors, pointing out that manufacturers had seen their reserves dwindle to a worrying level.

Such a law would be providential for Intel, but the political negotiations are slipping. “Passing the text is going to be difficult in an election year, when the two American parties are at war with each other,” added Rob Enderle.

Pat Gelsinger was nevertheless optimistic about his chances of success, especially as Washington sounded the alarm.

The Commerce Department conducted a survey of manufacturers including automakers and medical device makers, showing median inventory fell from 40 days of inventory in 2019 to less than 5 days in 2021.

“If a wave of Covid, a natural disaster or political instability were to disrupt a foreign semiconductor factory for even a few weeks, it could lead to the closure of a manufacturing plant in the United States, endangering American workers and their families,” the department said in a statement.

– Autonomous driving –

In the last quarter, Intel’s microprocessor branch, the group’s largest, earned $10.1 billion in revenue, down 7% from a year ago. A drop that the group explained by an unfavorable comparison with the last quarter of 2020, where sales had been record thanks to the pandemic.

The activity of electronic equipment for data centers has increased by 20% to 7.3 billion dollars.

And Mobileye, its Israeli subsidiary specializing in autonomous driving technologies, brought in $356 million in revenue (+7%). Intel announced in December that it plans to bring it to Wall Street in mid-2022.

The manufacturer of microprocessors has also welcomed a decision by the Justice of the European Union, which on Wednesday canceled a fine of 1.06 billion euros imposed in 2009 by the European Commission against Intel for abuse of position dominant.

© 2022 AFP

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