Amid more sales confidence, chipmaker Intel Corp on Thursday projected second-quarter earnings below Wall Street projections, showing that the business is still having trouble turning a profit amid early indications of a revival in the demand for chips globally.

Following a challenging 2022, shares of Intel sank 2% in after-hours trading after rising more than 10% this year.

Some chip industry experts are optimistic that an inventory build-up has cleared out, opening the door for new orders after first-quarter global PC shipments fell by around 30%.

 

Sapphire Rapids, Intel’s most potent data center processor, is now shipping at a faster rate after being delayed for more than a year.

According to Refinitiv data, the business predicted second-quarter revenue range with a midpoint of $12 billion, exceeding analysts’ consensus estimate of $11.75 billion.

Pat Gelsinger, the CEO of Intel, stated in an interview that he was “seeing some green shoots, increasing stability in the PC market as inventories have stabilized,” and that he anticipated the company would maintain its position in the data center industry.

However, according to Refinitiv statistics, Intel forecasted second-quarter adjusted losses of 4 cents per share, worse than the 1 cent per share profit that analysts had projected.

Sapphire Rapids, Intel’s most potent data center chip, has also seen an increase in shipments after a more than one-year delay that allowed rival Advanced Micro Devices and ARM-based server CPU makers to overtake Intel in the market.

Gelsigner claimed that on a recent visit, he spoke with Chinese government representatives about Intel’s $5.4 billion attempt to acquire Tower Semiconductor. To complete the transaction, Intel is still awaiting Chinese regulatory permission.

“It was a topic of discussion for many meetings that I had there,” Gelsinger remarked. “We don’t know for sure when that might happen, but we keep working very hard to get the acquisition approved,” the statement reads.

With a dominant position in the market for PC and server processor chips, Intel has announced plans to invest billions of dollars in new manufacturing facilities as well as in product development and performance.

The data center and AI group’s revenue decreased 39% to $3.7 billion. PCs are included in the client computing division, which saw a 38% decline in revenue to $5.8 billion.

The strong drive by Intel has cost money.

In order to keep up with competitors like Taiwan Semiconductor Manufacturing Company Ltd in terms of manufacturing technology and to expand its business of producing chips for external customers, the company cut its dividend payout in February to a 16-year low.

In order to keep up with competitors like Taiwan Semiconductor Manufacturing Company Ltd in terms of manufacturing technology and to expand its business of producing chips for external customers, the company cut its dividend payout in February to a 16-year low.

Revenue for the first quarter of $11.72 billion slightly surpassed the $11.04 billion forecast. In contrast to experts’ predictions of a 15 cent per share adjusted loss, Intel reported adjusted losses of 4 cents per share.