Intel clean rooms work through lockdown

The need for PCs, connectivity and datacentre capacity due to the coronavirus pandemic has driven revenue growth at chipmaker Intel. Company CEO Bob Swan described “world class safety” at Intel’s fabrication plants and said the company had expanded capacity to tackle the supply issues it faced in 2019.

“Our first-quarter performance is a testament to our team’s focus on safeguarding employees, supporting our supply chain partners and delivering for our customers during this unprecedented challenge,” said Swan. “The role technology plays in the world is more essential now than it has ever been, and our opportunity to enrich lives and enable our customers’ success has never been more vital.”

Intel’s Data Center Group reported revenue of $7bn, up 43% from 2019. The company said it had seen both an increase of 27% in the volume of server chips sold, and a 13% increase in the average selling price for these processors.

Swan referenced a quote from former Intel CEO Andy Grove to emphasise the company’s resilience to the pandemic’s economic impact. In the transcript of the earnings call, posted on the Seeking Alpha financial blogging site, he said: “To use Andy Grove’s words, bad companies are destroyed by crises. Good companies survive them. Great companies are improved by them. Guided by our cultural values, competitive advantages and financial strength, we will emerge from this situation even stronger.”

Swan then described Intel’s response to coronavirus, and how the firm has been able to continue producing chips during the lockdown. He said: “In a world where many of us are working remotely and socially distancing, the PCs and networking technologies delivered by Intel and our customers are providing a unifying fabric that is bringing us closer together, helping those directly struggling with the virus or caring for those who are enabling remote classrooms so that our children can continue to learn and connecting governments and businesses so they can operate and deliver goods and services.

“Our world-class safety standards have allowed our factories to continue to operate safely on a relatively normal basis with greater than 90% on-time delivery. We only allow employees in our factories who are essential to the factories’ operations. By design, our clean rooms and factories are among the cleanest places in the world.”

Swan also outlined how he wanted the company to be known not just for its x86 processors, but for its application specific integrated circuits (Asics), field programmable gate array chips (FPGAs) and graphics processors (GPUs). “Our opportunity set is more and more Intel silicon inside more and more computers, so that we can have a larger impact on our customers’ success,” he said.

Swan said Intel was seeing greater demand from its cloud and communication service provider customers, adding: “Cloud-delivered applications seen as conveniences a quarter ago, such as online shopping and video collaboration, have now become indispensable. We scaled our cloud and communication service provider businesses by 53% and 33% year-over-year, respectively, to help our customers meet these growing needs. These two segments now drive 70% of our datacentre segment revenue.”