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Intel's revenue from data-centre business misses estimates, shares slide
[NEW YORK] Intel Corp on Thursday missed revenue estimates for its data-centre business for the third quarter as the Covid-19 pandemic pushed its government and business customers to spend less on its chips, sending its shares down 8 per cent.
Revenue from Intel's data-centre business fell 7 per cent to US$5.9 billion in the reported quarter, while analysts on average had expected revenue of US$6.21 billion, according to FactSet.
Intel is the dominant provider of processor chips for PCs and data centres, but the company has struggled with manufacturing delays, saying in July that its next generation of chipmaking technology has slipped six months behind schedule.
Rivals such as Advanced Micro Devices (AMD) and Nvidia, which use outside manufacturers, have capitalised on Intel's woes and are gaining market share in both data centres and PCs, with AMD hitting its highest market share since 2013 earlier this year.
Intel, however, said a 10-nanometre chip factory in Arizona had reached full production capacity and that it now expects to ship 30 per cent higher 10nm product volumes in 2020 compared to January expectations.
The company said spending by government and business customers on its data-centre chips plummeted 47 per cent after two quarters of growth.
Excluding items, it earned US$1.11 per share, in line with estimates, according to IBES data from Refinitiv.
The company said it was expecting fourth-quarter revenue of about US$17.4 billion, while analysts were expecting revenue of US$17.36 billion.
Earlier this week, Intel said it would sell a money-losing commodity memory chip business to Korea's SK Hynix in a US$9 billion all cash deal, with Intel hanging on to a more advanced memory chip unit and using the cash to invest in other products.