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Intel shrugs off coronavirus with solid Q1 earnings, confirming that Tiger Lake is on track for midyear


Intel overcame the early effects of COVID-19 and reported a strong first quarter of 2020, confirming that the company plans to add its next Tiger Lake processor near the middle of the year, as well as add manufacturing capacity.

Intel chief executive Bob Swan also praised his staff for remaining on duty as the coronavirus ramped up, promising $100 million in assistance to his workers including special recognition for those who reported to Intel’s facilities to keep the company running.

Intel reported net income of $5.7 billion, up 42 percent from a year ago, on revenue of $19.8 billion, up 23 percent from the same period. (Intel’s second-quarter outlook calls for revenue to drop slightly, to $18.5 billion.) Intel’s data-based businesses exploded, specifically its Xeon-centric Data Center Group, whose revenue rose 43 percent to $7 billion. The larger PC-specific Client Computing Group experienced slower growth, up 14 percent to $9.8 billion. Intel attributed the growth in DCG to strong demand for data center products and the cloud, though the company said it expects government and enterprise demand to fall off during the second half of the year.

Likewise, Intel credited the work-from-home trend in driving strong demand for notebook PCs: The sector grew 19 percent from a year ago, Intel said. (Average notebook selling prices fell by a slight 3 percent, however, probably due to bargain-seeking consumers.) Desktop PC sales fell 2 percent, though average prices climbed by 4 percent. Intel said it doesn’t expect that notebook demand will necessarily continue, however, constrained by a global contraction of GDP as the year progresses.

Next up: Tiger Lake and more capacity

At CES, Intel first confirmed that its Tiger Lake chip would debut sometime during 2020. During the company’s earnings call, Swan said the 10nm chip will debut sometime during the middle of 2020, without divulging further details. Over 50 Tiger Lake notebooks are on track for the holidays, he said.

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Intel laid out what investors and customers should expect throughout 2020.

“This is going to be a great launch,” Swan said. “We are very excited about it.”

Swan also said that Intel’s shift to 10nm manufacturing was encouraging. Intel is holding about double the number of Tiger Lake CPUs in reserve that it did for the prior 10nm Ice Lake processor, to avoid supply shortages. “I think that gives you an indication of just how much our performance is improving in 10nm,” said George Davis, Intel’s chief financial officer, during the call. 

The coronavirus hasn’t affected Intel’s ability to try to resume a “tick-tock” manufacturing cadence, either, Swan said. Intel will be manufacturing 10nm products through to almost the end of 2021, when it will shift over to the 7nm node during the fourth quarter of 2021, he said.

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