Intel’s revenue last year was 28% dependent on the Chinese market, so a drop in demand due to an outbreak of coronavirus poses more threats than opportunities for the company. Nevertheless, if the demand for processors of this brand from Chinese consumers is reduced, globally, this will help Intel more easily survive the shortage.
Image Source: Intel
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Technological sector companies already have to articulate revised revenue forecasts for the first quarter, as the reporting period has overcome the conditional equator, and there are still no hints about improving the epidemiological situation in China. Even if local production does not suffer due to its geographical location and level of automation, in most cases the demand for components from Chinese consumers will decrease. TrendForce experts, however, in their recent report pointed out the possibility of revenue growth for server component suppliers in China, since quarantine related events raised the demand for cloud services in this country.
For Intel, the drop in demand in the Chinese market threatens with serious losses. Last year, the company earned in China nearly 28% of all cash. In addition, about 10% of buildings and equipment on the balance sheet of the corporation are concentrated in the region. Here is the largest Intel solid-state memory company. It is remote from the foci of coronavirus spread, but no one can predict whether Intel will be able to maintain its normal operation in the future.
This does not mean that the consequences of a coronavirus outbreak pose a threat only to Intel. DigiTimes reported today that Chinese distributors expect a two-fold decrease in sales of motherboards and video cards in the local market when it comes to the current quarter, and prefer not to make forecasts for the second quarter, the results of which are also unlikely to be comforting. Such a local failure in demand for Intel processors may make it easier for the company to combat the shortage of this type of product in other regional markets. Accordingly, to defend their position in the fight against AMD will be a little easier.
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