04/24/2020 12:02 PM
(Act. Apr 24, 2020 12:02 PM)
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Business with data centers and PCs is currently booming
© APA (AFP / Getty)
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The chip giant Intel has been a winner of the corona crisis so far: The demand for technology for data centers and laptops for home work has given the US company rapid growth and more profit. For the second half of the year, Intel fears that business will deteriorate due to austerity measures from companies and government agencies. “At some point, the effects of the recession will hit us,” said CEO Bob Swan.
In the past quarter, however, Intel exceeded all expectations. Because data traffic through video conferences, streaming and games increased explosively during the corona period, operators of network infrastructure and cloud services are currently expanding their capacities. Intel benefited from this in the data center chips business with a 43 percent jump in sales to $ 7 billion. At $ 3.5 billion, operating profit was 90 percent higher than a year ago. The growth could also extend into the second half of the year, Swan said in a conference call with analysts after the US market closed on Thursday.
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But the purchase of notebooks for home work also made itself felt in Intel’s business with PC chips: sales in the corresponding division increased by 14 percent to around $ 9.8 billion. With an operating profit of $ 4.2 billion, it earned 37 percent more than a year earlier. In the current quarter the growth in the area will continue, then the demand should be saturated, Intel estimates. The business of the subsidiary Mobileye, which specializes in driver assistance systems, will meanwhile suffer from the decline in sales in the auto industry.
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Overall, first quarter sales increased 23 percent to $ 19.8 billion. Profit increased 42 percent to $ 5.7 billion. In the meantime, investors temporarily dropped the share in pre-exchange trading on Friday by around five percent after the earnings forecast for the current quarter was below expectations. Intel did not venture a new annual forecast after the first was canceled due to the corona crisis.
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There had also been new speculation on Thursday that Apple wanted to switch its Mac computers from Intel processors to in-house chips with the same architecture as in its iPhones. The first such devices are planned for the coming year, wrote the financial service Bloomberg. For Intel, that would be a setback in the computer business.
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