PC Sales Help Intel's Q2 Results
Intel reported second-quarter 2017 financial results, and among the highlights is the strong performance of Intel's Client Computing Group (CCG).
Revenue hit $14.8 billion, up 9 percent from the same period last year, net profits jumped 111 percent to $2.8 billion and the company now expects 2017 revenues of $61.3 billion at 61 percent gross margins.
The PC group, which still makes up 60 percent of Intel's sales, grew 12 percent to $8.2 billion in the quarter. While volumes were only up in modest single digits, sales continue to shift toward gaming PCs and thin-and-light notebooks that command a premium.
Intel's data center group, its second largest unit, saw sales rise 9 percent to $4.4 billion. Sales to cloud computing giants rose 36 percent while sales to business users sagged, as companies continued the trend of outsourcing computing.
Intel's flash group rose to be its third largest division growing a whopping 58 percent to a still relatively small $874 million. But the group will not be profitable until next year because Intel is ramping both its 3DXP chips in its Lehi, Idaho joint venture fab with Micron as well as 3D NAND in its own Dalian, China fab.
Intel aims to shift its mix of flash sales more to 3DXP as it qualifies new products next year.
Last but not least, Intel's IoT group jumped 26 percent to $720 million in sales while the former Altera FPGA division fell 5 percent to $440 million.
Intel has started sampling 10nm chips and "yields are continuing to improve pretty much right in line with [traditional] ramps rates," according to the company's CEO Brian Krzanich. "It's a new technology so there are always some problems to solve, but we're pretty comfortable with where we are at now," he added.
First 10nm processors for PCs should ship early next year. Higher end parts will come later in the year in a traditional Intel ramp, he said.
Intel sold some of its stake in lithography maker ASML, a move that will help fund its acquisition of automotive specialist Mobileye, expected to close in the third quarter.