You can get Intel’s (INTC) numbers from a dozen different places so I won’t bother with the obvious. Here are just a few bullets that you should keep in mind if you’re an Intel investor, a technology investor, or just plain wondering what’s going on at a macro level.
Management commented that, for the first time in quite a while, the company is seeing improvement in desktop PC demand in the corporate market. They’re not willing to declare the start of a enterprise replacement cycle but you could sense the relief. Cisco (CSCO) signaled it had seen early signs of such a change back in February and Intel saw strong server demand in December. But now the all-important desktop is showing signs of life.
Intel’s 44% top-line growth mirrored the 47% revenue growth reported by Acer (number two PC OEM) for its March quarter. No disconnects there!
The demand for the company’s new 32nm products was dramatically greater than anticipated. The implications of this are twofold.
First, Intel is pulling forward the migration of its third and fourth fabs to its 32nm process and expects to have those completed by the fourth quarter. This acceleration is likely to be the catalyst behind the company increasing its gross margin outlook for 2010 from 61% to 64%. Assuming the world doesn’t fall apart over the next nine months, I think it’s reasonably certain that they exceed 64% for the year.
Second, Advanced Micro Devices (AMD) will probably report really great numbers Thursday after the close. However, the chasm between these two remains quite wide. Intel sets pricing and Advanced Micro Devices dances to that tune. Semiconductor costs are essentially a function of silicon area. Intel started its 32nm ramp in the December quarter as Advanced Micro Devices was just completing its migration to 45nm on its microprocessors. Advanced Micro Devices is not expected to produce 32nm parts until sometime in 2011, at which point Intel will be on the 2x-node. Advanced Micro Devices remains at a severe competitive disadvantage.