Intel Corp CEO Bob Swan on Wednesday gave new long-term forecasts that indicate the chipmaker’s growth would remain stalled.
His comments, during his first investor event as chief executive, sent the shares down 2.5 percent at the close of trading in New York.
Intel last month said that sales would decline this year and it reduced forecasts for profit and revenue in the current quarter.
Swan said the chipmaker let investors down when it cut the guidance.
“I do just want to acknowledge the present,” Swan said at the company’s headquarters in Santa Clara, California. “We let you down. We let ourselves down.”
While sales of the company’s data-centric products — a term coined to include server and other chips such as artificial-intelligence processors — would expand at a percentage in the high-single digits, the unit’s growth would not be enough to overcome the sluggish PC market, he said.
Total revenue would increase by low, single-digit percentages over the next three years, he said.
PC sales declined 4.6 percent globally in the first quarter, after a similar decline in the fourth quarter of last year, market researcher Gartner Inc said.
Sales of Intel’s main PC processor business would decline or be unchanged during the next three years, Swan said.
Intel needs to improve its “execution rhythm” and will focus more on changing itself to respond to new markets, he said.
The stock is the worst performer on the Philadelphia Stock Exchange Semiconductor Index this year, having gained 4.9 percent to US$49.24 at Wednesday’s close.
At the heart of the concerns are signs of competition for Intel’s lucrative server chip business and its lack of progress in production technology. Investors are concerned Swan can no longer rely on the server unit and technical leadership to continue a record run of earnings growth.
Intel needs to change its culture, Swan said.
It can no longer make good products and expect customers to come, he said, adding that the firm needs think of itself as having a much lower share of bigger markets and aim its products to customers’ needs.
Intel has been struggling to shift its factory network to more advanced techniques. That has left the company and the computer industry short of manufacturing capacity.
In response, the company prioritized making higher-priced chips — server and high-end desktop processors — causing a scarcity of supply, particularly for cheaper laptops.
Intel initially sparked concern last year that it might be losing its edge in manufacturing when the company confirmed it would not mass produce semiconductors made with 10-nanometer technology until later this year.
That may put it behind rivals such as Taiwan Semiconductor Manufacturing Co (台積電).
Swan said Intel would focus on profitability and returns as he evaluates the company and its markets.
The modem business failed to achieve returns and Intel is considering what to do with the unit after losing Apple Inc as a customer.
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