For several quarters in a row, Intel emphasized that it had no problems with increasing the volume of its own products, but it was not in full demand on the market due to a shortage of related third-party components. At the quarterly reporting conference, the company’s management made it clear that it is not worth counting on defeating the deficit until the end of this year, and it will continue for part of 2023.
Image Source: Intel
Intel CEO Patrick Gelsinger remindedthat last year the company lacked substrates, silicon wafers, and the same laptop manufacturers suffered greatly from the shortage of some third-party components. Other market segments were also affected, whether it be the server, automotive or Internet of Things segments.
Intel considers itself a privileged player in the market because it has its own manufacturing facilities. The latter allow not only to quickly respond to surges in demand, but also better control the cost of production. At least now, Intel is minimally dependent on the prices of contract manufacturers’ services, and therefore does not transfer their growth to the cost of its own products for customers.
In the fourth quarter, the company managed to ship a record number of server components, and the cost of 10nm products was reduced by 30% in a year. Intel partners were able to increase the number of substrates produced for its needs, albeit with direct financial assistance from the processor giant. As the CEO explained, the company, within the framework of long-term contracts, increased the amount of advance payments once morest future deliveries of silicon wafers, substrates, process equipment, as well as the provision of services by contract manufacturers. In fact, regarding $1.6 billion in advance payments were made in the fourth quarter, eight times more than a year earlier. What has been achieved with ASML is also a matter of special pride. supply agreement the first mass-produced lithographic scanner that allows the production of chips using Intel 18A technology using high-aperture optics.
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