Intel Corporation (NASDAQ:INTC) posted an increase of 19% YoY to $19.73 billion in Q2 2020. The growing demand for PCs for work from home played a vital role in its earnings boost and post profits of $5.11 billion (up 22% YoY). After-hours trading, its shares declined by 10% because the chip giant will introduce advanced chips for super-fast computing only in 2022.
Delay in introducing 7-nm chip technology
Intel expects to launch advanced CPUs that feature 7nm technology in 2022. It is delayed by 12 months compared to internally set targets. It is one of the companies in Santa Clara, California, to withdraw its earnings forecast for the future because of the ongoing coronavirus crisis.
Work from home boosts PC sales
Tech companies show some resilience to the slowdown caused by COVID-19 pandemic because they supply products and tools to support work from home, studying remotely, and getting in touch with friends and family.
According to IDC Research, Chromebook and PC sales are surged by 11.2% YoY in Q2 2020. However, Gartner Research reported a 2.8% YoY growth because it does not consider the sales of Chromebook in its calculations. According to IDC, PC sales are 21 million in the US on increased buying by workers and students.
Intel expects to post revenues of $75 billion in Q3 2020. It falls short of the forecasts of Wall Street. The company expects to lose 3% in revenues annually because Apple decided not to use Intel’s CPUs in its Mac Computers.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is challenging the dominance of Intel in advanced chips by introducing high end and economical CPUs in the market. Intel is facing difficulties in mass-producing advanced chips. A whopping 17% surges the market share of Advanced Micro in the CPU segment in Q1 2020. Advanced Micro will release its Q2 2020 earnings on July 28, 2020.
Intel is also facing design issues in 7nm chips and producing CPUs using 10nm technology. It found the problems in 7nm chips design and will move on to correct and avoid further delays. The company could use the services of external manufacturers to satisfy surging demand for its chips.