(Reuters) – Chipmaker Intel Corp forecast second-quarter revenue above Wall Street estimates on Thursday, a sign that chip demand was recovering after a downturn wrought by excess supply and a post-pandemic slump in the personal computer market.
Shares of the company rose 2% in extended trading, having gained more than 10% so far this year following a tough 2022. A fall of about 30% in first-quarter global PC shipments has made some chip industry experts hopeful that a build-up of inventory has cleared out, paving the way for fresh orders.
Intel has also ramped up shipping of its most powerful data center chip Sapphire Rapids, which was delayed for over a year.
The company forecast second-quarter adjusted revenue in the range of about $11.5 billion and $12.5 billion. Analysts polled by Refinitiv were expecting revenue of $11.75 billion.
Intel has also ramped up shipments of its most powerful data center chip, Sapphire Rapids, whose more than one-year delay had allowed rival Advanced Micro Devices and ARM-based server CPU makers to take market share from the company.
Still, Intel has a commanding share of the markets for PC and server processing chips and the company has planned to spend billions of dollars to build out new manufacturing hubs and improve the design and performance of its products.
Revenue from its data center and AI group fell 39% to $3.7 billion. Client computing group revenue, which includes PCs, fell 38% to $5.8 billion.
Intel’s aggressive push has, however, come at a cost.
The company in February slashed its dividend payout to the lowest in 16 years as it saves cash for investments meant to help it catch up with the likes of Taiwan Semiconductor Manufacturing Company Ltd on manufacturing technology and facilities the growth of its foundry business.
Revenue in the first quarter was $11.72 billion, compared to estimates of $11.04 billion.
(Reporting by Chavi Mehta in Bengaluru; Editing by Maju Samuel)
