• Intel, which makes chips and other components for PCs, has reported its worst-ever loss in company history for Q1 2023.
• Its revenues fell nearly 36 percent year-on-year with almost all of its segments making less money than they did last year.
• As PC shipments continue to fall as we head deeper into 2023, Intel’s outlook continues to be a bleak one, at least for now.

In its first-quarter results for the year released on Wednesday, computer component manufacturer Intel reported a historic loss in revenues as PC shipments continue to plummet the world over.

As per the results (PDF), Intel’s revenue dropped nearly 36 percent since the same period last year to $11.7 billion from $18.4 billion. Earnings per share suffered a massive 133 percent annual reduction, rounding out a record-breaking quarter for the company.

In terms of its segment results, Desktop PC sales (which recorded $2.6 billion in 2022) fell to $1.9 billion in 2023, a 38 percent drop. Its Notebook sales also fell from $6 billion to $3.4 billion.

Basically every other segment the company manages, even including its Data Centre and AI department, experienced a drop in revenue, except for Intel’s self-driving tech Mobileye which increased to $458 million compared to $394 million the previous year. Intel says it was a “record first quarter” for the segment.

The company expects its revenue for Q2 to remain around $11 billion, either dropping further to $11.5 billion or increasing to $12.5 billion. It expects to lose 4 cents (USD) per share, according to its outlook for the next quarter.

CNBC reports that this is the fifth consecutive quarter of falling sales for Intel, and the second consecutive quarter loss. And the company expects to continue to struggle into 2023 with PC shipments still on the downward slump worldwide with an over 40 percent fall annually compared to the same period last year.

Tough global economic conditions are leading the hefty drop in PC demand, including higher interest rates and inflation pressing down on consumer wallets. The war in Ukraine has also impacted the markets negatively, which Intel has pointed out in its results.

With less expendable income, people are rather holding on to their older PCs than splurging on new rigs or expensive upgrades. Not even the likes of Apple are succeeding in moving PCs in 2023. Its notebook shipments fell 34 percent year-on-year to 41.8 million.

Intel says that its restructuring (AKA layoffs), as well as other cost-cutting initiatives are starting to show an upside. The microprocessor producer’s CEO Patrick Gelsinger says that the company is also expecting to PC market to begin stabilising into 2024.

A sentiment echoed by market research firm IDC, but that depends if the US economy begins to improve.

“If the economy is trending upwards by then, we expect significant market upside as consumers look to refresh, schools seek to replace worn down Chromebooks, and businesses move to Windows 11. If recession in key markets drags on into next year, recovery could be a slog,” said Linn Huang, research VP for Devices and Displays at IDC.

[Image – Photo by Christian Wiediger on Unsplash]