Intel sets $54 billion revenue record

Despite all the doom and gloom about the PC industry being destroyed by tablets, Intel had a record year. The company raked in $54 billion over the course of 2011, good for a net income of $12.9 billion. Predictably, the PC Client Group was responsible for most of the revenue—$35.4 billion, an increase of 17% over last year. Revenue was up for the Data Center Group by the same percentage, but Atom revenue fell by 25% from 2010.

  2011 2010 vs. 2010
Revenue $54.0 billion $43.6 billion up 24%
Gross Margin 62.5% 65.3% down 2.8 pts.
Operating Income $17.5 billion $15.6 billion up 12%
Net income $12.9 billion $11.5 billion up 13%
Earnings per share $2.39 $2.01 up 19%

In addition to slowing Atom sales, Intel also faced shrinking margins. The firm’s 62.5% gross margin for 2011 is 2.8 points lower than the same figure for 2010. Intel predicts its margins will grow to 64% over the course of 2012, though. Revenue is expected to hit $12.8 billion for the first quarter of this year. Intel isn’t making any predictions about the year as a whole, but it says $10.1 billion will be spent on R&D alone.

I suspect Sandy Bridge-E will help on the margins front, particularly when the EP version rolls out for servers. Intel will surely face more pressure from ARM-based devices in the mobile space. Whether Android support and Windows 8 can make the Atom more attractive for that market remains to be seen, but Ivy Bridge should at least help populate the market with more affordable ultrabooks.

Comments closed
    • Proxicon
    • 8 years ago

    Intel is reaping the fruits of AMD’s labors. Or mis-labors.. If thats a word…

    I really, really, wanted bull-dozer to be a success that I could buy. I just could not find myself rewarding failure again (I bought a X2, & Phenom) and bought an Intel chip for the first time in many years…

    • ronch
    • 8 years ago

    No surprise. You’ve got to be a die-hard AMD fan to get a Bulldozer over a Sandy Bridge.

    Just look at those folks at TigerDirect testifying how great their FX-8150 chips are. I can’t believe it. They get a water cooling kit, overclock to 4.8GHz, and swear by the speed of their system. Then again, I suppose those guys have their own power plants.

    • DeadOfKnight
    • 8 years ago

    What’s with all the Intel hate lately? They make good products. I, for one, am happy to see the PC industry continue to thrive.

    It is a shame to see AMD doing so badly, and this is likely what is fueling the growth of Intel, but so far it doesn’t seem as though Intel is taking full advantage of consumers with higher prices. Right now Intel has the ability to be a lot greedier than they are.

    Also, I think that the ultrabook revolution is a welcome change to the lazy, cheap notebooks we have been seeing for several years now. Ramping up the baseline graphics will also help to eliminate the decitful low-end, completely useless GPU market.

    AMD is doing even better at this, and although it seems to be the only card they really have to play right now, in this time of “good enough computing” you still have options, which is what you really want, is it not?

    I remember the days when a “gaming” rig cost about as much as the double-stuff, if not more. The economy is horrible right now, but this is one industry that seems to be less affected by it because it is still getting less expensive for more and more power. If that’s not a reason to be optimistic, I don’t know what is.

      • MadManOriginal
      • 8 years ago

      The hate is simple to explain – people who are losers hate a winner.

        • ew
        • 8 years ago

        – Donald Trump

      • ronch
      • 8 years ago

      Rather than pricing their chips high and allowing AMD to raise prices also, Intel is thinking long term. They’re using their cash reserves to weather out pricing their chips this low, which squeezes AMD further down the ladder, forcing them to price their chips really low, relative to Intel’s. This means AMD will have less money to fund further R&D, and as time goes by it will become harder and harder for them to compete until they bail out. At that point, Intel will raise prices like there’s no tomorrow.

      I think AMD has already realized this, and is trying to keep prices up (like $245 – $270 for the FX-8150) even if it means they have worse price/performance ratios. They have their fanboys to save them, anyway.

        • DeadOfKnight
        • 8 years ago

        As far as CPUs are concerned, I don’t see any reason for anyone to stay an AMD fanboy at this point.

        I’ve never been anyone’s fanboy though, and I get buyer’s remorse for everything so what do I know?

          • NeelyCam
          • 8 years ago

          [quote<]As far as CPUs are concerned, I don't see any reason for anyone to stay an AMD fanboy at this point.[/quote<] AMD needs to be supported so they don't go under... because if they do, CPU prices will double. I won't be making that sacrifice, though...

            • MrDigi
            • 8 years ago

            ARM is Intel’s new competition. AMD RIP.

            • NeelyCam
            • 8 years ago

            ARM is not real competition for another 3-5 years. If AMD goes under now, Intel is free to laugh all the way to the bank for a couple of years.

            • ronch
            • 8 years ago

            I wouldn’t make the sacrifice either. One thing that works in AMD’s favor though, is the proliferation of ARM. Suddenly, x86 isn’t the only game anymore and they have another architecture open to them. So even if they quit x86 there is hope for them. With everyone jumping on the ARM bandwagon Intel might think twice about drastically increasing x86 CPU prices even without AMD in x86 anymore, which could make ARM alternatives look more compelling. Of course, this is just a theoretical scenario.

    • esterhasz
    • 8 years ago

    There seems to be a real psychological difficulty to accept that the Asia/Pacific market is now the most important in the world for electronics and that western consumer trends – as impressive and exciting as they may be (iPad) – are no longer the main narrative when it comes to selling tech.

    I do think that tablets are here to stay but margins will tighten once Android tablets come into their own, and while I am no longer an Intel shareholder, I think that they have been doing just the right thing (in terms of money-making) over the last years.

    22nm will bring the 2 core Ivy Bridge down to 100mm2 and if things continue to go well fab-wise, I doubt that ARM designs will continue to keep their current cost advantage for a very long time. Tegra 3 is 80mm2 (OK, it’s a full SOC but still) and sells for a fraction (I guess between 15% and 20%) of what Intel currently charges for ULV CPUs. While the ARM licensees are competing to the blood (and against a monster in terms of economies of scale, Samsung), Intel can just wait for it’s manufacturing advantage to play out. No need to race to the bottom.

    At currently 3.4% dividend yield, Intel stock is way better than a savings account and I think that there are good times ahead for the company.

      • NeelyCam
      • 8 years ago

      I agree with your point; just wanted to point out that 1mm^2 of 22nm Intel trigate is quite a bit more expensive than 1mm^2 of 40nm TSMC.. What “quite a bit” means is anybody’s guess (+20%? +50%? +100%?), but I think overall you are correct that Intel will have a cost advantage.

        • esterhasz
        • 8 years ago

        Yeah, good point – it will certainly take some time (5 years?) but if you look at how much more powerful Intel’s “core” line is (apparently a single core Atom trounces any ARM dual core and Atom has worse performance/watt than even SB), ARM has a long way to go if they want to make a dent beyond where they are currently at. Because if tablets will be mostly content consumption devices, they are already fast enough – but if they want to keep extpanding into other spaces (e.g. gaming on the big screen as Apple is trying out via the ATV), they will need the additional power…

    • NeelyCam
    • 8 years ago

    [quote<]In addition to slowing Atom sales, Intel also faced shrinking margins. The firm's 62.5% gross margin for 2011 is 2.8 points lower than the same figure for 2010. Intel predicts its margins will grow to 64% over the course of 2012, though.[/quote<] The combined 2011 margins look worse than in 2010, but actually they've been going up all year (Q1:61%, Q2:61%, Q3: 63.4%, Q4:64.5%), and Q4'11 margin pretty much matched the Q4'10 one. If I remember right, the first half margin hit was largely attributed to the Sandy Bridge chipset issues.

    • Tristan
    • 8 years ago

    Thanx Bulldozer 🙂

      • beck2448
      • 8 years ago

      Tough for AMD to compete with Intet, who has 10 billion in R and D budget, more than AMD is worth.

        • ish718
        • 8 years ago

        Intel has a army of engineers & scientists while AMD runs with a platoon.

        • Vasilyfav
        • 8 years ago

        All they had to do was release phenom III on 32nm.

      • esterhasz
      • 8 years ago

      The problem is that even if Bulldozer had met expectations in the consumer market – the Server variant has been quite well received after all – AMD would not have been able to manufacture it in quantities that would have made a real difference.

      I think we will have to understand that from now on, AMDs “enthusiast” CPUs are a waste product of their efforts in the server space. The days AMD goes head to head with Intel in all product segments are over and we will have to shift our expectations accordingly. “Good enough” performance in the form of APUs is where AMD is carving its niche.

    • indeego
    • 8 years ago

    That gross margin prediction is pretty crucial for Intel. I imagine if it misses this and gross margin decrease again in 2012 you’ll have very very sad investors.

    I can’t think of a time period however when Intel processors mean less and less to my daily computing tasks. What I have now is vastly overpowered for my needs and most cores stay mostly idle, even on servers…

      • NeelyCam
      • 8 years ago

      [quote<]That gross margin prediction is pretty crucial for Intel. I imagine if it misses this and gross margin decrease again in 2012 you'll have very very sad investors.[/quote<] They missed it badly in Q1/2011 (predicted 64%, got 61%) because of SB chipset SATA issue. Q4 it was back to 64.5%. Estimate for 2012 is 64%. [url<]http://www.intc.com/releasedetail.cfm?ReleaseID=640998[/url<] I bet the gross margins will start coming down if revenue from smart phone chips goes up significantly, but I'm not sure that would bother investors so much if the overall profit goes up.

      • sschaem
      • 8 years ago

      When to bet on it ? … easy go short Intel.

      Intel in 2012 success wont be on margin, but on growing sales.

    • NeelyCam
    • 8 years ago

    Noooo!! How can this be?!?! The Analyst said PC market had collapsed!

    I think this is [i<]all lies![/i<] This is probably just a fake demo by a guy in a funny hat. And Anand probably came up with the fake revenue numbers.

      • windwalker
      • 8 years ago

      [url=http://www.nytimes.com/2012/01/20/technology/weak-sales-of-pcs-hurt-microsofts-income.html<]Windows[/url<] revenue is down 6%.

        • derFunkenstein
        • 8 years ago

        but Intel is in 100% of another OS’s market, and their sales are up.

        • sschaem
        • 8 years ago

        Windows division sales goes up and down by up to 50%.
        Check revenue a quarters or two after a release, it massive… check at the tail end (where we are now) its weak.

        So 6% down at the end of a cycle while PC builder are struggling with HDD inventory is actually surprising low.

        Check vista and windows7 sales. And check PC unit sold worldwide. It keep growing and growing and growing.

        PC sales are exploding in china, india, south america, etc.. close 20% year over year!
        And those countries are the bulk of the PC market.

        The PC market is set to 361.6 million unit this year (tally so far), the most EVER.

        And channel forcast show that unit might go over 400 million this year, another blockbuster year.

        And Microsoft will release windows8, and cover tablets.

        And for Intel… Brand new multi billion market for the taking !

        Goldman sacks “After our trip to asia we can report that the PC market is falling of a Cliff”
        I see the same type of bullshit in the current reports… Completely ignoring reality.

        The tablet market is very fragile, but company like Microsoft and Intel benefit either way. (Well, when windows8 and medfield is out)
        If tablets die completely (they wont) , intel and microsoft couldn’t care less.. but if they boom, they benefit greatly.
        Its just more S* to sell.

      • Joe Miller
      • 8 years ago

      Did you feel hurt of the fake demo to bring the point again in a completely different topic?

    • StuG
    • 8 years ago

    Some of that money was mine for the first time this year. Oh bulldozer, if only you had delivered.

      • ludi
      • 8 years ago

      You and me both. *checks the i2500k’s food and water bowls*

        • burntham77
        • 8 years ago

        You soulless sellout bastards!

        =(

          • ew
          • 8 years ago

          I recently upgraded from a Athlon II x2 to a Phenom II x4. It cost $80 and I have way more CPU power then I need. I think AMD is still competitive in the mid and low range. IMHO people put too much weight on the value of being the best in the high range. The $200+ consumer CPU market seems completely pointless to me.

            • ludi
            • 8 years ago

            Different priorities. My last system was an Opteron 180 on Skt939, going on five years old, and I want this one to last five years without an overhaul of the barebones components. Barring catastrophe, there will probably be one video card upgrade in 2-3 years, and one or two storage upgrades.

            Also, I process a fair number of 18mp images in RAW, and between the CPU and memory upgrades the image preview and manipulation are very responsive compared to before. Notably, some basic post-processing filters that I typically apply are running about four times faster (as in, 3-5 seconds instead of 12-20). That does matter when you’ve just dumped 300 shots to disk after a vacation, and need to sort out the 200 duds and then deal with the 100 or so keepers that will be left..

    • ish718
    • 8 years ago

    Thanks to Anti-Competitive Business Practices

      • Phr3dly
      • 8 years ago

      Or maybe it’s the totally kick-ass product lineup.

        • Sahrin
        • 8 years ago

        …which they can only finance because they bribed people to use their products over competitor’s. Cause and Effect, people. You know what paid for Core architecture development? The Pentium 4.

          • Duck
          • 8 years ago

          But they would still be where they are now pretty much even if they lost money on the P4.

          • tfp
          • 8 years ago

          Really the one thing to remember is the Pentium 4 was competitive most of it’s life time. Willmet was similar to AMD of the day (and the high end P3s were faster at times in the beginning on specific workloads), Northwood was ahead of AMD in general. P4e/presscot was really the bad apple of the group, “ok” performance mostly behind the AMD CPU of the day and hot. A lot like a few of AMDs releases of the last few years.

            • Sahrin
            • 8 years ago

            >Willmet was similar to AMD of the day

            Williamette wasn’t faster than any K7-based Athlon clock-for-clock or on an absolutel basis. This was what they created the “Performance Number” naming system. Remember buying a 2500+ that had a clock frequency of 1.8Ghz?

            >(and the high end P3s were faster at times in the beginning on specific workloads)

            This is like saying “Bulldozer is faster than Ivy Bridge…on specific workloads.” The final P3’s were a joke, and need I mention the recalls.

            > Northwood was ahead of AMD in general.

            Northwood was essentially the final P4. It came out a year before Hammer launched. You can’t reduce 5 years of parts to a single product that was the market leader for a single year.

            >P4e/presscot was really the bad apple of the group, “ok” performance mostly behind the AMD CPU of the day and hot. A lot like a few of AMDs releases of the last few years.

            Your memory is clouded. Intel’s CPU’s were a joke compared to AMD’s until, as you said, they finally released the P4C Northwoods (note “C” – third major revision). The performance gains were largely related to better bigger TLB’s and cache’s…basically, Intel “outspent” AMD by putting larger dies out. Typical Intel.

            AMD released the K7 and went from about 18% of the market to about…18% of the market. For 3-4 of the 5 years of that product cycle, AMD led easily and handily in performance, user experience, everything. Meanwhile, AMD struggled to keep the doors open. Because the products were worse? It doesn’t sound like it. Because Intel was bribing customers not to use AMD? Probably more true.

            • tfp
            • 8 years ago

            First off no one cares about clock for clock it’s overall performance and now perf-per-watt. If you remember there was a “big issue” with the AMD performance numbers was that once Northwood was out because the numbers weren’t accurate. AMD defense was the performance numbers were vs an older AMD CPU of XMhz or faster not vs Intels P4. This was also the time frame of everyone being upset about dual channel memory that Intel was running because of cost but this is what gave the P4 with it’s extra cache it’s lead. AMD has still not figured out how to do cache well I think if they could run the current L3 at CPU clock like intel they would be competitive.

            Second Bulldozer isn’t faster than anything clock for clock or overall vs anything but maybe the Atom. P3 tually were faster than Willmet, but way too costly to be worthwhile.

            Once AMD had the Athlon64 out they won much of the benchmarks vs the P4e, Intel might have had them blocked out of places like dell up to that point. That did end around the time of the Athlon64 or Athlon X2 was released. However they didn’t have the Fab capacity to take the market share when the sun did shine on them and they were being run by inept management (Hector the sector rector). After core2 they have never really competed expect for on the low end.

            • Third_Eye
            • 8 years ago

            You are right on the mark. As I said in the Semiaccurate forum, even though the current AMD problems of late (specifically with Zambezi) are self inflicted, in the early to late mid 2000s AMD was being held up bcos of Intel’s strong arming. The only worthwhile thing that Hector Ruiz did for AMD is suing Intel thus exposing most of the dirty laundry for the public to view. The biggest problem with AMD was capacity. It just had capacity to satisfy 20-25% of the market. Intel x-license agreement with AMD mandated how much of AMD chips that they can produce in non-AMD fabs which artificially limited AMD growth.
            Once Intel was able to comfortably change path and follow AMD style of thinking (performance, low power, more IPC, less clock speed, more efficient) and took the lead with the Core 2 series of processors, they then paid AMD to stop the case as well as granted third party fabbing of AMD chips which led to AMD manufacturing being spun-off as Global Foundries.

      • flip-mode
      • 8 years ago

      Thanks noncompetitive competitor.

        • ish718
        • 8 years ago

        You better thank the “noncompetitive competitor” or else you would be paying $xxxx for your CPUs.

          • tfp
          • 8 years ago

          Or we’d be running SPARC, POWER, MIPS or some other CPU. Someone would have tried to step in to big of a market not too.

            • eofpi
            • 8 years ago

            Alpha would’ve been perfect for it. It even had x86 decode capability on-die and a native Windows NT.

            Alas, DEC had no interest in the consumer market, and HP killed the project when they bought out Compaq. And we’ll never see Alphas in the US again, because Intel picked up the IP a few years later.

            • tfp
            • 8 years ago

            Alpha had a really awesome piece of software as well that would generate Alpha binaries from running x86 so it could be run naively on subsequent executions of a program assuming I am remembering correctly.

          • tfp
          • 8 years ago

          I have always wonder how much of that is an artifact of how IBM set up it’s second source item for x86 CPU with Intel as the primary and AMD as the secondary. With Intel making most of the sales it would be easy to keep it that way going forward.

        • ronch
        • 8 years ago

        .. and their non-competitive foundry partner called GloFo.

      • Grigory
      • 8 years ago

      Not anymore.

      • ModernPrimitive
      • 8 years ago

      Several years ago Intel played pretty dirty IMO. They don’t need to play now. AMD quit playing defense, much less offense. The Bullsnoozer was the biggest letdown of the past 5 years for me, easily besting the Barcelona letdown before it.

      I would love to see AMD and Intel trade fair and even blows again…

      • Vasilyfav
      • 8 years ago

      QUICK, Get that AMD excuse rolodex out!

    • Geistbar
    • 8 years ago

    That’s a rather huge revenue uptick over a single year.

    Also… At ~$25 a share, you’re getting back about 10% of the stock price every year. Seems a pretty nice deal to me, though I’m not in a position to be concerned with stocks at the moment. So it might just be a middling return rate in actuality, for all I know.

      • UberGerbil
      • 8 years ago

      EPS is not a dividend: it’s just earnings divided by the number of outstanding shares — which tends to look good both because of earnings growth and because Intel buys back shares every quarter. (Intel dividend has been running about 20 cents a share; you look at [url=http://seekingalpha.com/article/294056-intel-corporation-dividend-stock-analysis-2011<]dividend and the growth in the share price[/url<] to figure what you might be "getting back" in the future)

        • Geistbar
        • 8 years ago

        Ah, thank you very much for the clarification. Seems a bit silly, now that you’ve explained it, to have thought earnings per share and dividends were the same.

      • DavidC1
      • 8 years ago

      You’d still get 4% back from dividends if you bought it at $21 early in the year, and nearly 5% if it was bought when everything was so gloomy for Intel @ $17-18 late last year.

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