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As semiconductor sales decline, Intel’s quarterly revenue records an unprecedented 36 percent decline.
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Rising chip prices, a global chip glut, and weak hardware demand all harmed Intel’s rival Samsung.
Due to a sharp decline in demand for semiconductors, or chips, which power personal computers and smartphones, Intel reported a dramatic drop in sales for the first quarter of 2023 on Thursday.
In the past three months, Intel’s revenue dropped 36% to $11.7 billion (roughly Rs. 95,629 crore), and the semiconductor giant reported its largest-ever quarterly loss of $2.8 billion (roughly Rs. 22,885 crore).
In addition to punishing Intel’s rival Samsung, which earlier on Thursday reported its worst quarterly profits in 14 years, rising prices, a global chip glut, and weak hardware demand also hurt Samsung.
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Although the loss and sales collapse were slightly less disastrous than anticipated, the stock still declined by about 2% in after-hours trading.
Along with Samsung and TSMC from South Korea and Taiwan, Intel is one of the top manufacturers of semiconductors in the world. It produces a wide range of products, including the most recent generation of chips.
Additionally, it struggled to compete with Nvidia for the semiconductors supporting ChatGPT-style generative AI, a significant new and chip-hungry market for the industry. It was also impacted by the declining demand for chips that power data centres.
The chips market is notorious for its volatility, with demand and supply swinging with changes in the global economy. Chips power technology such as smartphones and automobiles.
During the height of the Covid pandemic, its crucial position in the world supply chain became apparent.
During a time when everyone was turning to the internet for work, shopping, and entertainment, lockdowns and health regulations reduced production coming out of Asia, leaving a surge in demand for chips unmet.
Semiconductors have also become a political pawn in the conflict between the United States and China, with Washington urging allies to stop supplying cutting-edge chips to China, further destabilising the sector.
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