Intel Corp slashed its annual sales and profit forecasts on Thursday after missing estimates for second-quarter results as demand for its chips used in personal computers cools, sending shares down 10%.
The Intel Corporation logo is seen on a display in a store in Manhattan, New York City, U.S., November 24, 2021. REUTERS/Andrew Kelly GLOBAL BUSINESS WEEK AHEADslashed its annual sales and profit forecasts on Thursday after missing estimates for second-quarter results as demand for its chips used in personal computers cools, sending shares down 10%.
The company also forecast current-quarter results well below expectations, blaming the "sudden and rapid decline" in economic activity and execution issues. Runaway inflation and the reopening of offices and schools have led people to spend less on PCs than they did during lockdowns, when many bought computers for work and school as they stayed home during the pandemic.Chipmakers are also under pressure from a spate of COVID curbs in key PC market China and the Ukraine war that have worsened supply-chain snarls and dragged demand further. Global shipments of PCs are expected to drop 9.5% this year, according to IT research firm Gartner.
Still, Intel will not delay its $20 billion investment for a new mega chip factory in Ohio because of this tougher period, Gelsinger told Reuters. "You just don't build factories like this based on a couple of quarter cycles," said Gelsinger. "The semiconductor industry is doubling over the decade and I need capacity to grow into that opportunity."
While Intel took a major hit with the latest downturn, its competitors fared much better. Taiwan Semiconductor Manufacturing Co Ltd
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