Intel's Otellini talks profits, 14nm and Haswell

January 18, 2013 // 11:30 a.m.

Tags: #14nm #atom #cpu #financial #haswell #intel #paul-otellini #processors #system-on-chip-soc #tri-gate

Intel has been one of the companies hit by the slowing PC market, but you'd struggle to tell from its latest quarterly earnings report: the company has made $0.48 per share, higher than the $0.45 per share predicted for Q4 2012.

Despite being hit by the slowing consumer interest in buying new PCs, which has seen shipments of desktops and laptops shrink 6.4 per cent year-on-year, Intel's latest earnings call reported impressive net income of $11 billion - based on $13.5 billion revenue - for the quarter to make up a total of $53.3 billion for the 2012 financial year. Even after everything was deducted, Intel came out of one of the toughest quarters yet with a profit of $2.5 billion for the quarter - and that's despite spending $1 billion to buy back 47 million shares of previously-public stock.

'The fourth quarter played out largely as expected as we continued to execute through a challenging environment,' claimed Paul Otellini, current Intel president and chief executive. 'We made tremendous progress across the business in 2012 as we entered the market for smartphones and tablets, worked with our partners to reinvent the PC, and drove continued innovation and growth in the data centre. As we enter 2013, our strong product pipeline has us well positioned to bring a new wave of Intel innovations across the spectrum of computing.'

That isn't to say that Intel was unaffected by the overall market conditions, of course: the company's PC Client Group - responsible for desktop and laptop products - saw its revenue drop 1.5 per cent from Q3 and an impressive six per cent from the same quarter in 2011. The data centre group, meanwhile helped soften the blow with a seven per cent quarter-on-quarter growth and four per cent year-on-year. Coupled with a one per cent increase in gross margin and a tax rate of 23 per cent compared to an expected 27 per cent, that growth helped keep Intel well in the black.

Otellini had some interesting claims to make as he revealed the figures to analysts and press during the company's conference call. 'It's no longer necessary to choose between a PC and a tablet,' he claimed. 'Convertibles and detachable, combined with Windows 8 and Touch, provide a two for one, no compromise computing experience. Ultrabooks have also served to accelerate the trend towards thinner and lighter notebooks. For example, the volume of systems less than one-inch thick grew 18-fold last year in the U.S., and we expect to see the same trend continue around the world.'

Otellini was also hopeful for the company's smartphone and tablet products, boasting that there are now seven devices available across 20 countries using Intel's 32nm Medfield Atom system-on-chip processor - a start, but dwarfed by the number of devices using some variant on Cambridge-based rival ARM's IP. Otellini also discussed 22nm manufacturing, tri-gate technology and his company's partnership with ASML on extreme ultra-violet lithography (EUV) and 450mm wafer production.

'Looking ahead to 2013, I am excited about the strong pipeline of our products we have coming to market,' Otellini concluded. 'In the first half of this year we will launch Haswell, enabling one of the most significant changes to the PC since Centrino in 2003. Haswell was designed from the ground up to enable breakthrough innovations in form factor, battery life and usability. It will deliver the single largest generation-to-generation battery life improvement in Intel's history, and it is inspiring a new wave of ultra-sleek, convertible touch-based designs across our customer base.'

Otellini also promised 22nm Xeon and Atom products, targeting the micro-server market, later in the year, while stating that Intel would also be looking to begin production of its first 14nm products towards the end of the year - a bold claim when the company's competitors are still largely stuck on a 28nm process node.
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