Intel gave a lacklustre third-quarter sales forecast, indicating its data centre chip business continues to competition heats up.
While demand for Intel’s lucrative server chips improved in the second quarter when compared to the previous quarter, it was still a 9 per cent decline, signalling that recovery is still some time away.
This performance is in line with global server shipment growth numbers, which in the second quarter is expected to be softer than originally forecast due to the slowed integration of new AMD and Intel chips by the major cloud solution providers and deferred infrastructure projects in China, Bloomberg reported. Intel’s Q1 results reported in April saw a 20 per cent yearly decline in data centre revenues.
Research firm TrendForce lowered its sequential server shipment growth estimate from 19.6 per cent to 17.7 per cent. The unfulfilled server orders are expected to be resolved in the second half of the year, which will reaccelerate growth.
In June, Chief Executive Officer Pat Gelsinger had predicted that there will be a shortage of semiconductors that’s hurting a whole lot of industries- from automotive to consumer electronics.
“I don’t expect the chip industry is back to a healthy supply-demand situation until 2023. For a variety of industries, I think it’s still getting worse before it gets better. I think it will bottom out in the second half of this year before starting to improve,” he said.
Competition is also heating up. More Chinese companies from different sectors are speeding up efforts to enter the semiconductors sector.
South Korea’s government plans to offer more tax incentives for chipmakers and revise laws. According to the Ministry of Trade, Industry and Energy, The proposed Bill on expanded tax incentives and eased regulations, will be submitted to the parliament by September, the ministry said.