Thunder exploded in the middle of the night, the global chip giant Intel has a big event: just plummeted 150 billion

On the evening of the 23rd, the trillion-dollar chip giant in the US stock market exploded, plummeting by more than 11%!

The market value of chip giants suddenly plummeted by more than 150 billion

Under the epidemic, Intel failed to deliver a performance report that satisfies the market.

After the opening of the US stock market on the 23rd, Intel fell by more than 10%, and its market value evaporated by nearly 25 billion US dollars, which is equivalent to 150 billion yuan.

After the U.S. stock market closed on October 22, Intel announced its results for the third quarter of fiscal 2020. According to the financial report, Intel’s revenue for the quarter was US$18.33 billion, a year-on-year decrease of 4%, slightly higher than market expectations in July; net profit was US$4.28 billion, a year-on-year decrease of 28.6%; core business data center revenue was US$8.422 billion, A year-on-year decrease of 10%.

At the same day’s earnings conference, Intel Chief Financial Officer George Davis said that personal computer demand has shifted from desktops and high-end commercial PCs to entry-level consumer and educational products. Despite the increase in sales volume, the average selling price fell, impacting the bottom line.

Operating income for the data center group, which sells server chips, fell 7 percent to $5.9 billion, missing expectations of $6.21 billion. George Davis said the segment’s revenue decline was mainly due to weak demand caused by the new crown pneumonia epidemic, which came from a 47% year-on-year decrease in demand for revenue from the corporate and government markets. On the other hand, new-generation high-end chips are more expensive to produce, squeezing profit margins.

The new crown pneumonia epidemic also hit Intel’s non-volatile storage group and Internet of Things group revenue performance. The non-volatile storage group is mainly responsible for Intel’s memory chip business, with revenue of $1.153 billion in the last quarter, compared with $1.290 billion in the same period last year; while the IoT group’s third-quarter revenue was $911 million, compared with $1.29 billion in the same period last year. $1.234 billion.

In fact, the last time Intel’s stock price fell sharply, it happened in late July. At that time, due to the delay in the production of 7nm chips, the stock price suffered a severe setback, plummeting 16.24%, and the market value evaporated by 41.5 billion US dollars (about 291.1 billion yuan).

Intel is developing 7-nanometer chip manufacturing technology, but it has been delayed due to technical reasons. Intel is not favored by the market due to the company’s poor research and development of 7-nanometer chip products. Today, its stock price is only two-thirds of that of old rival AMD, and its total market value is also lower than that of Nvidia.

Intel said its self-produced 7-nanometer chips won’t be available until the second half of 2022 to early 2023. The company said on a July 24 conference call that 7-nanometer chips may be handed over to third-party foundries in the future. At the earnings conference, Intel CEO Ruibo said that a decision will be made in January next year.

gradually shrink the front

Intel is gradually shrinking the front line, focusing on the core business.

Following the sale of the baseband chip business and the connection chip business, Intel has once again made a move.

On October 20, South Korea’s Hynix announced a $9 billion agreement with Intel. The former will acquire the latter’s memory chip business, including the solid-state drive business, NAND flash memory chip products, wafer business, and Intel’s production in Dalian. factory. This move means Intel’s complete exit from the flash memory market.

According to the latest research data in 2020, in the global NAND Flash market ranking, the top six are Samsung, Kioxia (renamed after Toshiba sold its storage business to Bain Capital), Western Digital, Micron, SK Hynix and Intel. Among them, Intel’s market share is the smallest, only 11.4%.

Meanwhile, Intel has fallen behind in its own core CPU space. In July this year, Intel said that its performance in the second half of the year would be worse than expected, and further delayed the launch of 7-nanometer chip technology, and said it would entrust production to a third-party foundry. The news also caused an uproar in the industry, and Intel’s stock price fell. more than 15%. Friends such as TSMC and Samsung have made progress on 5nm and 3nm. On the other hand, AMD is also eroding Intel’s market share with the Zen architecture.

“Intel’s CPU has been delayed in this generation, and they need to focus more resources on the CPU after getting rid of some non-core businesses.” Industry sources said.

In recent years, the NAND business has been plaguing Intel, and it has officially disclosed that it plans to use the funds obtained from this transaction to develop industry-leading products and strengthen key businesses with long-term growth potential, including artificial intelligence, 5G networks, and autonomous driving-related edge devices . In the third quarter, Intel’s memory business revenue fell 11% year over year, despite a year-over-year increase in average selling prices.

For Intel, there is only one key point behind the risk and that is funding. Companies need a lot of capital investment to maintain the needs of research and development, and also need to maintain the operation of the business line at the same time. As you can see, it’s not just competitors who are investing heavily in capital, but customers like Apple have recently announced billions of dollars in investments to move Mac products from Intel chips to Arm CPUs.