Citing strong demand for cloud services and work-from-home and study-from-home upgrades, Intel reported Q2 revenue of $19.7 billion, up 20 percent year-over-year (YoY). GAAP earnings-per-share (EPS) was $1.19, up 29 percent YoY. However, the company warned of slower growth in the second half of the year and production delays with its next-gen 7-nm CPU manufacturing, which will be delayed by six months.
“It was an excellent quarter, well above our expectations on the continued strong demand for computing performance to support cloud-delivered services, a work- and learn-at-home environment, and the build-out of 5G networks,” said Bob Swan, Intel CEO. “In our increasingly digital world, Intel technology is essential to nearly every industry on this planet. We have an incredible opportunity to enrich lives and grow this company with a continued focus on innovation and execution."
Data-centric revenue grew 34 percent, accounting for 52 percent of total revenue; PC-centric revenue grew 7 percent YoY.
Some highlights:
- Data Center Group (DCG) revenue was up 43 percent YoY driven by broad strength including 47 percent YoY growth in cloud service provider revenue.
- In Q2, the company introduced its 3rd Gen Intel Xeon Scalable processors and new additions to its hardware and software AI portfolio for data center, network and intelligent-edge environments.
- Intel's memory business (NSG) set a new revenue record in the quarter.
- Intel's portfolio for 5G network infrastructure gained customer momentum, most notably the 10nm-based Intel Atom P5900 for wireless base stations.
- Mobileye continued to win new ADAS designs in a challenging economic environment for automotive, and Intel acquired Moovit, a mobility-as-a-service (MaaS) solutions company.
- The PC-centric business (CCG) was up 7 percent YoY in the second quarter on notebook strength driven by the continued work- and learn at home dynamics of COVID-19, which also contributed to a volume decline in desktop form factors as demand shifted to notebooks.
- Intel's first 10nm-based server CPU “Ice Lake,” which remains planned for the end of this year. In the second half of 2021, Intel expects to deliver a new line of client CPU’s (code-named “Alder Lake”), which willinclude its first 10nm-based desktop CPU, and a new 10nm-based server CPU (code-named “Sapphire Rapids”).
- Intel said its 7nm-based CPU product timing is shifting approximately six months relative to prior expectations due to the yield of its 7nm process, which based on recent data, is now trending approximately twelve months behind the company's internal target.
