Intel Corp on Thursday gave an upbeat sales and profit forecast, citing improved demand for semiconductors that power cloud-computing data centers, while shrugging off concerns that the trade dispute between the US and China is hurting the electronics industry.
The chipmaker forecast that fourth-quarter revenue and profit would come in ahead of analysts’ projections, sending its shares about 3 percent higher in after-hours trading.
Intel also reported better-than-expected third-quarter results.
While Intel’s peers are reporting increasing difficulties amid the China-US trade dispute, the company is benefiting from a rebound in orders for the lucrative server chips that run giant data centers.
Intel’s customers are buying more of its priciest chips, boosting revenue even as the number of total units sold slightly declined.
The company also committed to buying back an additional US$20 billion of its shares in the next 18 months, a move that chief executive Bob Swan said underlines Intel’s belief that investors should have more faith in its growth plan.
“The headline number was impressive,” Sanford C. Bernstein analyst Stacy Rasgon said. “The controversy will come around how much of this is sustainable.”
Demand for the company’s chips is “fundamentally strong,” Intel chief financial officer George Davis said in an interview.
Unlike some other chipmakers, Intel is not seeing demand being hit by the trade tensions. Moves by some customers to stockpile chips ahead of tariffs that might increase prices does not explain the majority of the improvements, he said.
“China was a modest positive relative to expectations,” Davis said.
Intel shares climbed as high as US$56.95 in extended trading following the report.
Sales in the third quarter were little changed at US$19.2 billion, the Santa Clara, California-based company said.
Analysts on average had forecast US$18 billion, data compiled by Bloomberg showed.
Net income was US$6 billion, or earnings per share of US$1.35, compared with forecasts for US$1.17.
Gross margin, or the percentage of sales remaining after deducting the cost of production, was 58.9 percent in the quarter.
Revenue in the fourth quarter would be about US$19.2 billion and earnings per share would be about US$1.28, Intel said in a statement.
That compared with average analysts’ estimates of US$18.9 billion and US$1.16.
The company has been struggling with manufacturing and supply problems, as well as weaker underlying demand in the chip markets it dominates.
Swan committed to increasing the output of Intel factories next year so that customers get all of the chips they need.
Shortages have been the firm’s biggest problem this year, he said.
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Intel Corp has received licenses from US authorities to continue supplying certain products to Huawei Technologies Co (華為), a company spokesman said yesterday. Washington has been pushing governments around to world to squeeze out Huawei, saying that the telecom giant would hand data to Beijing for espionage. From Monday last week, new curbs have barred US companies from supplying or servicing Huawei. This week, the state-backed China Securities Journal reported that Intel had received permission to supply Huawei. China’s Semiconductor Manufacturing International Corp (SMIC, 中芯國際), which uses US-origin equipment to make chips for Huawei and other companies, last week confirmed that it had sought
INVEST IN TAIWAN: A metal components casting firm and the world’s largest maker of aluminum bicycle rims also obtained approvals to join the program Solar Applied Materials Technology Co (SOLAR, 光洋應用材料), a part of Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) “green supply chain,” has pledged to invest NT$1 billion (US$34.1 million) to build a new plant at the Tainan Technology Industrial Park (台南科技工業區), the Ministry of Economic Affairs said yesterday. SOLAR has been collaborating with TSMC to extract precious metals from waste and reuse them as “sputtering target” material in high-end semiconductor manufacturing, a TSMC press release issued in May said. Established in 1978, SOLAR also offers key materials and integrated services to customers in the optoelectronics, information and communications technology, petrochemicals and consumer electronics industries,
‘SWARM TECH’: Joint venture FARobot is to develop autonomous mobile robots that would first be deployed in Hon Hai’s factories to optimize production efficiency Hon Hai Precision Industry Co (鴻海精密) and Adlink Technology Inc (凌華科技) have formed a robotic venture that aims to use “swarm technology” to create robots that can communicate with one another on the factory floor to optimize production efficiency. Hon Hai is Apple Inc’s leading iPhone assembler and the world’s largest contract electronics maker, while Adlink supplies industrial computers and Internet of Things solutions. Through a subsidiary, Hyield Venture Capital Co (鴻揚創投), Hon Hai holds a 51 percent stake in autonomous mobile robot (AMR) developer FARobot (法博智能移動), while Adlink owns the remaining 49 percent. Together, the two companies put up NT$200