Intel is nothing, if not consistent.

Intel Reports Record Quarter: Fines? Pah! - Editorial 2

The giant chipmaker announced a record quarter in terms of gross and net revenue.  Sales were a brisk $11.46 billion, while the net revenue was a staggering $3.39 billion.  Just to remind all those out there, a good quarter for AMD is a gross revenue of $1.6 billion, and a profit in the $100 million range.  NVIDIA often scrapes around $900 million gross, and $80 to $100 million net.  Market caps for these latter two companies vary between $7 billion and $9 billion.  Just think, in a full year, Intel can buy either one of them out… with cash.

This is certainly a sign that the PC market has recovered for the most part, and Intel has consistently profited through this past year.  Even though the company ended up paying a paltry $1.25 billion to AMD, another $1.4 billion to the EU, and now will be paying NVIDIA $1.5 billion over the next five or so years, Intel came out this past year well in the black.

The desktop and notebook processor markets were steady, with a slight dip in the Atom market.  The big gains were in the server markets, where the Nehalem/Bloomfield processors reign supreme.  Intel has effectively reduced AMD’s marketshare in this very lucrative market, and until Bulldozer starts shipping Intel will continue to reap the benefits of supplying a better overall platform.  Things look so good for the semiconductor giant, that it expects Q1 revenues (typically the lowest quarter of the year) to hold steady between $11.2 billion and $11.9 billion.  Net revenue should still be around the $3 billion mark.  Gross margins are in the 67.5% range, and there should be little fluctuation.

Intel is continuing to transition their product offerings on 32 nm, and we expect to see the vast majority of CPUs being shipped at this node by Q3 of this year.  AMD is still at least a quarter away from shipping 32 nm parts for the server market, and about two quarters from shipping desktop parts at that node.  AMD’s saving grace right now is the new Brazos platform, which should help the company retain their CPU share numbers.

It seems as though the majority of legal issues that Intel has been fighting for the past few years have all come to a head.  Sure, Intel paid out a lot of money, but it really did not end up affecting the business to any great degree.  This is really a tremendous quarter for Intel, and they are certainly healthy.  The recent Sandy Bridge processors are another leap forward for the company, and when we consider the performance of these chips vs. the actual price, it is really putting the squeeze on AMD and their margins for their 4 and 6 core processors.

Intel does not look to have any out of the ordinary expenses, and R&D for both products and process work is staying steady.  Intel again has a huge advantage over its competition by being the first to ship in volume 32 nm parts, and has been doing that for the past year.  The juggernaut that is Intel just keeps rolling.  Though it will be interesting to see where Intel goes with the rise of ARM in both the handheld, and now tablet markets.  Intel sold off its XScale unit some years back, which was focused on embedded and power sensitive devices.  For the handheld market Intel tried to leverage Atom in the “Silverthorne” garb, but there was no takeup whatsoever of those parts.  With competitors like NVIDIA now working closely with ARM to release not just power efficient devices, but also higher wattage and complexity ARM based products aimed at notebook, desktop, and high performance server markets, Intel’s reaction to this major sea change in the industry will be fascinating to watch.