Q3 2007 expected revenue updated to between $9.4 billion and $ 9.8 billion from $9.0 to $9.6 Billion as a result of stronger than expected worldwide demand for its computing products. . Gross margin expected to be in the upper half of the previous range of 52 percent plus or minus a couple of points (Source: Intel Investor Relations)
- Expected gross margin percentage in 2007 Q3 to be 52%, from 46.9% in Q2, primarily due to
o lower start-up costs related to our 45-nanometer process technology
o Lower micro-processor unit costs
o Higher unit volumes from micro-processors and chipsets. Operating income increased by 9% in 2007 Q2 compared to 2006 Q2. - YTD 2007 – 51% of revenues came from Asia-Pacific, 18% Europe, 11%Japan and only 20% Americas. Figures in the same quarter YTD 2006 were 49% Asia-Pacific , 18% Europe, 12% Japan and 21% Americas (Source - Intel Financial Statements filed at sec.gov) In the current situation of uncertainty in the American economy but confirmed robust global growth especially in emerging markets, Intel is safe-guarded against any slowdown in the American economy.
- Notebooks as % of Consumer PC Market Segment – Europe (68%), US (58%), Asia-Pacific (39%) in 2007. These figures in 2003 were 42%, 30% and 18% (when Intel Centrino chip came out)
- Market Opportunity 2011 Silicon Revenue TAM
2011 Unit TAM > 900 Million Units
Internet $10B
Mobile Internet Device $10 B
Ultra Low Cost PC $10B
Source: Intel Investor Rel
ations
Meanwhile, datacenter capital expenditures by the big internet companies have risen exponentially in the last few years, creating greater demand for sophisticated data servers, which in turn use sophisticated chips to optimize performance and speed.
Other recent notable Intel moves
- 1. Sept 5, 2007 Intel Corp unveiled the industry’s first quad-core processors designed for multi-processor servers. The new Quad-Core Xeon 7300 series processors can deliver more than twice the performance and more than three times the performance per watt over the company’s previous generation dual-core products. These high-end processors provide an ideal platform for virtualization and server consolidation – a concept that is fast catching fancy, considering VMware’s stellar IPO. VMware and Intel have worked together to optimize VMware ESX Server. Using the VMmark benchmark, which measures virtualization performance, an Intel 7300 series-based system achieved the highest single-server virtualization metric. According to the producers of Half-Life, the Quad-Core chip had a improvement greater than 40% on performance. (Source: Intel Investor Relations)
Standard & Poor recently selected Intel as "stock for the week" for its The Outlook. According to S& PO, the seminconductor industry is in the early stages of an upturn with stonger sales of PC's, competitive technological advances and an enticing valuation. After losing to AMD over last couple of quarters in a fierce price war (where Intel's desktop - segment market share fell from around 80% in early 2005 to 71% in early 2006) the company has shored up distributor relationships, more competitive pricing and diversified their product line. Mobile is the second-largest volume contributor and the fastest-growing segment by both volume and revenues and currently Intel accounts for around 82% of market share. S&P estimates earnings growth of around 20% this year and have a 12 month price target of $30.
