TagIntel

• Intel is cutting management pay across the company to cope with a shaky economy and preserve cash for an ambitious turnaround plan.
• Intel is still committed to offering a competitive dividend, but analysts have speculated that the company may lower its payout to cope with the slowdown.
• Intel is cutting costs tremendously at the expense of their employees, including quarterly pay bonuses, annual bonuses, 401k match, merit-based raises, and a pay cut to all employees’ base salary.
• Intel should suspend the dividend when Pat Gelsinger announced IDM 2.0, but instead he pursued the same path as his predecessors.
• AMD is gaining marketshare in the data center, with sales to North American hyperscalers more than doubling year-over-year.
• AMD is back on top in terms of margin, with Intel’s underutilization of its fabs costing the company four points of margin.

Published February 1, 2023
Visit Stratechery to read Ben Thompson’s original post Intel Pay-Cuts, and Revisiting the Dividend Question; Investor Honesty; AMD’s Earnings

• Intel CEO Pat Gelsinger is leading the company through a multi-year turnaround, attempting to catch up to TSMC in terms of process and create a customer service organization from scratch.
• Intel’s current financial woes are the result of years of decisions and investments not made, leading to a mismatch between decisions and consequences.
• Intel is still paying a dividend despite its need for cash, likely due to its long history of dividend payments and the need to maintain investor support.
• Intel’s adjusted free cash flow was negative $4 billion, and the company is forecasting a gross margin of 34% for the next quarter.
• Intel is taking an especially large hit from losing market share to rivals, and is eliminating jobs and slowing spending on new plants in an effort to save as much as $10 billion.

Published January 30, 2023
Visit Stratechery to read Ben Thompson’s original post Intel Earnings, Intel’s Plunging Margin, The Dividend Question