On October 22, Intel released its third-quarter financial report, with revenue of US$18.3 billion, down 4% year-on-year and 7% month-on-month; net profit of US$4.3 billion, down 29% year-on-year and 15.7% month-on-month. Notably, Intel’s data center business turned abruptly from high growth to decline this quarter.
Intel CFO George Davis said Intel believes orders from cloud servers are slowing.
In the past five years, Intel has transformed to “data-centric”, and the proportion of related businesses in total revenue has increased from 20% to about 50%, becoming Intel’s core business.
Data-centric business is divided into Data Center Group Division (DCG), Internet of Things (IOTG), Autonomous Driving Business (MBLY), Non-Volatile Memory Solutions Group (NSG), Programmable Solutions Group (PSG) five parts.
Parts of Intel’s Q3 revenue
From Q3 in 2019 to the present four quarters, the data-centric business revenue has continued to grow, and the growth rate of Q1 and Q2 in 2020 has reached 34%. In the financial report for the third quarter of 2020, the revenue of this business in this quarter was US$8.422 billion, down 10% year-on-year and 16.8% month-on-month. Among them, the Data Center Group (DCG) revenue fell 7% year-on-year to $5.9 billion.
Intel took a closer look at the decline in revenue in the Data Center Group segment (DCG):
They believe that the change is mainly due to the “epidemic” impact. After the revenue of enterprises and institutional units in DCG increased by more than 30% in the first 2 quarters, Q3 fell by 47%, cloud revenue increased by 15%, while the average sales of the entire department Prices fell 15% year-over-year, resulting in a 39% year-over-year and quarter-over-quarter decline in data center Q3 operating profit.
Intel estimates that the trend of weak data center market demand may continue, and the Q4 data center business revenue will decline by 25% month-on-month.
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