The year 2022 is complicated for Intel. For the first time in decades, the firm posted a loss of $500 million on its financial results. The causes are multiple: the war in Ukraine slows sales, while inflation increases prices and manufacturers manufacture fewer PCs to avoid surplus.
The effects of the pandemic and the war in Ukraine are beginning to be felt for brands. Intel, like Meta and other major tech groups, announced figures in the red for this second half. With total revenues of 15.3 billion dollars over the last few months, the manufacturer displays a decrease of 17% compared to the previous year, 22% compared to the beginning of the year.
At the same time, the firm’s margin fell to 36.5% from 57.1% last year. Result: Intel shows a negative balance sheet, with an overall loss of $500 million. This is historic: it has been several tens of thousands of years since the group had recorded a loss. As often, the factors are of course multiple.
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Why Intel is losing money for the first time in years
First, you should know that Intel is trying save resources since the shortage of components, especially in view of the launch of its 13th generation of processors, which will take place on October 17. In addition, the manufacturer mentions “a rapid decline in economic activity” to justify the drop in sales, caused among other things by global inflation as well as the geopolitical situation resulting from the war in Ukraine.
This is not the first time that Intel has mentioned this situation. A few days ago, the firm warned users the prices of these processors will increase by this fall, a consequence, precisely, of inflation. Finally, PC manufacturers also save money by making fewer machines to avoid excess. Consequently, fewer CPUs and GPUs are purchased from Intel.
“The results for this quarter are below the standards we have set for the company and our shareholders”said Pat Gelsinger, CEO of Intel. “We have to do better and we will. The sudden and rapid decline in economic activity has been the main driver, but this shortfall also reflects our own delivery challenges. »
