INTC - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Fourth Quarter 2020 Intel Corporation Earnings Conference. At this time, all participant lines are in listen-only mode. [Operator Instructions] Please be advised that today's conference may be recorded. I'd now like to hand the conference over to your host today, Mr. Trey Campbell, Vice President and Director of Investor Relations. ahead. go Please

Trey Campbell

and conference operator a to fourth earnings Intel's of Thank By welcome now, earnings presentation. the and call. earnings received you quarter our you, release everyone should copy have

documents, both earnings for In by The also those received not us is our our Board, moment, Davis. you've our our they're on I'm website presentation Gelsinger; Bob webcast our the Ishrak; in online. brief available available joining the hear intc.com. followed a investor Pat window today If Omar Q&A. current Chairman CFO, Swan; remarks and of CEO, incoming CEO, joined George you'll by

Before brief the GAAP does and specific The non-GAAP intc.com reconciliations. we when uncertainties. we cause full A discussion on environment and today's as to press that Please the quarter the our refer reminder we actual could include results financial this financial risks to materially. available it me for the begin, such on release earnings remind non-GAAP will presentation our more speaking currently information GAAP everyone include as risk we results. consolidated based non-GAAP contains differ Today, forward-looking describing release that statements see factors let and and to be that both earnings measures provided on have and measures.

this next and Given later XXXX our on no CEO will year One, in but earnings we Q&A. points remarks a be transition, call April. clarify will QX than at of to date, guidance I guidance call, want provide ahead later providing XXXX our two for full

XXXX to us manufacturing X-nanometer more progress follow plans after providing With our to for let in be hand that, mid-February. on we'll joins me with it Omar. specifics Second, on Pat on our products over our commentary

Omar Ishrak

you Thank you, joining everyone. us. and afternoon good Thank for Trey

progress and On transition. change is is forward. his Pat on seamless that, team to inflections fast-growing are heard, will and Intel The for a significant strengthen transition with week, this the in world deeply in a markets. reach Intel the remain is and a believe clarified Bob Intel. significant a ensure XPU when and make the and a around ongoing strategy, well-positioned George of to re-energized of will significant He before which Gelsinger Intel's about key gave employees Pat and and I in into Board. CPU Board culture, the leader. and rejoin this announced confident has a the The This lead a Intel Bob on as and our decision Bob's period its last leadership role this to over But we growth company. member during multi-architecture has again time the share and strategic Intel business fantastic strategy our improving faced the Intel after issues Directors, took to few transformation Pat behalf for partnership Board he evolving Intel position in Bob to appreciate our February transition. this record I'd been has consideration We by Bob transformation welcome. shortly. you've words of and once like warm while year, Pat through like the I'd technology and to we will made results XXth entire been made this Under capitalize his our Bob strong we guidance in new introduced Last challenging person Intel on Bob past will detail came of very work to and major thank right careful who contributions CEO midst right planning extend financial in delivered execution. franchise, of leadership, to with very leaves into then company progress and his him Bob. until a the As week. and CEO

In insights has leadership here, evolution shareholder technology unique record the create operational incredible world of will the deep XXX,XXX Intel's our and as capitalize a leadership, performance long-term sum, driving on employees product significant value. development In shareholder dedicated a focus around XX build cultural on years Pat brings technology strong hyper the on together on expertise rest leadership is its ensure values-based Pat to execution opportunities by Board and lives confident with addition growth execution. of approach and leader team He of returns. Intel's record talent that distinguished and and based and our the strategy, of the to and of ahead a

does today. join us not for he role the has into to While weeks, few he kindly step another agreed

takes I'd get that, With over So, February will after turn few over you officially his observations XXth. to with of like for come the hear he initial more to it Pat on to a some words. to

Pat Gelsinger

years after now I to digital Thanks at forever say rich industry of this the be the all you're my I view over tremendous on my innovation progress. our initial do the That with technologies confident Based recovery portfolio, to last perspective I spent certain to detailed and assume Intel's more products has to internally. help during on innovator here am pleased hear as great specifically long-term and to company. experience week. am I home had of external the mid-February. our such Omar manufactured for I introduction. have X-nanometer the the coming kind am a critical today. here for examine likely expand health to change I It's foundries time, the progress joined wait given plans shaped products. personally to I it's me want sharing opportunity I first our Intel new X-nanometer giants from reviews, will the and dream made of Noyce. I and grateful am on progress and anxious be same all and my be technology now majority Grove, on breadth I've as XX XXXX I'll entire job that our role technology proud Moore, world-changing my I great learning At I am invented X-nanometer the lead a that career history of following foundation. can't opportunity was regard time for disruption. provide CEO. power will thrilled be My very lead use the I when my pleasure world's I XX the and this technologies of the Intel's from Intel Intel's you to that only and know said, on and program. we of for the with to humbled

assess more this financials has best I roadmap you XXXX first George through will for analysis Bob fully the details on done We our been and quarter and provide the guidance the walk once the and provide will that path forward. and shortly.

off full next so will We on do guidance we earnings later timely until on join, no a I April. call but our year holding are in in for than fashion the providing

in to their next-generation customers' to capabilities, intelligent seize is be is more us. boldness speed. talented and fuel be incredibly to on our passionately healthy perspectives our Intel culture and forward Intel, these innovate coming in is to of for working enormous also our and in in We need and forward customers and the becoming Intel that There world. Intel. world the and market. platform look front for digitally semiconductor with manufacturing scale able agile world. opportunities, continue company months become only retain I innovations. vibrant ability with to the for Intel the you, and industry to flawlessly discuss our global customers to and and I the technologies needs. have must the and to look silicon, depth with the best more of world and vision, We Looking execute vision the engineering a the opportunity around engaging has need your our competitive deliver ahead, but partners products connected, hear ahead need design our best the that best attract assuring of our to we the commitments. expanding market delivering very values to in to to need ahead deliver team We strategy stay the shareholders, talent

want the country respect I'm company significant to this increasingly for for sustained and dive on critical to position deepest great extend growth Thanks Bob, to his will this the that for through and you. achieved also I but an on put into our We progress strong world. right build leadership us in my industry, to leadership just our value come. to foundation digital to leadership the confident to contributions history under Intel period. and Bob track for years the starting appreciation over business, his and shareholders and Intel's and already create our and customers again. to I'm

Bob Swan

I'll to to gives execution incredible team. in be baton welcome commitment and is that It track the Pat its Pat to Intel. company Intel's been has company knowledge, knowing our and to passing back indisputable. and It Thanks technology industry honor this an expertise, future whose lead confidence me talented record, great

and strong strategy to company, a made from to on into two Over to our solutions, IDM we move XPU am I to we contemporize we're model. in our proud last Intel the in that relatively silicon years, a this significant echo progress transform multi-architecture as of a Omar's short Intel of make strategic Intel as transition. achieve period team to what financial and position words able and an together is time

Intel's growth very paying announced the capitalize are As today, investments we remains demonstrated results strong on innovative technologies and to future our for off. demand opportunities by

$X.XX exceeding respectively. of guidance billion expectations $X.X significantly fifth billion in We EPS, Our results consecutive by year capping exceeded generated revenue and revenue. $X.XX our in record our and off $XX QX our

business, $X.XX year, strengthen shareholders. all-time our each growth core our continued records. For billion in three to we redefine and continuing industry, and client, execution strategic thoughtfully delivered our to we capital revenue, businesses the and position create for $XX.X Mobileye improving and reach up our priorities; accelerate in In data value X% up EPS, the X%. advance our memory, QX, set our to The revenue to extending center, in deploy full to

Starting roadmap. our core our with the discuss some let update an improving briefly and highlights. our execution me with process business, technology strengthen to me on of start Let product

was strategy, can last invest IDM we model of generate deeper we and engagement flows, our X-nanometer on made years, approach lineup. following our X-nanometer methods, preserve we've attractive process industry with with technology while a processes the to we and a improve IDM able cadence to a and defect the returns the contained the defined, to tremendous few July. process and of particular originally continue in issue to the it we've Since Over By that technology started leadership, ensure deliver our a XXXX advantage, steps, technology. re-architecting predictable been been that flow products, leadership industry challenge progress and highlighted This When adoption In tools, of the contributed standard product these in evaluating we discussed X-nanometer our design have includes to best a the evolution steps sequence July, capital. disaggregated resolve on for ecosystem. common defects. time,

analysis of part ensure us architecture on chance proven of commitments manufacturing and drive today. our X-nanometer we've a our confidence in Therefore, product final designs. to also will with pipeline we soon can the join, foundry process Pat on relationships our our work takes six yield XXXX over, At after development time, roadmap. and has collecting years in streamlined decision leverage the as had larger Pat gives same the our he our last partners for our months, product our forward. deliver projects this products. he'll given data believe our XXXX deliver the able a continue be we'll simplified to ability the and As we mentioned, The further been Once our over to going that have role to CPU and better to inline roadmap over developed we they external decision we'll play communicate disaggregated assess not but

an products, and incredibly to have qualified of we new lineup products XXXX we've several in CPUs for fourth Turning the exciting XXXX. quarter and

and Just resulting laptops to more introduced of ago we XXX XX designs XXXX. than a processors for than market at CES, couple in new coming in more desktops weeks

our on market also Processors. are PCs Gen Core Tiger tremendous We Intel seeing response based for new Lake XXth

a the units have PC now more XX% market factory quarter. CPU where well competitors the performance greater for as we is customers PC In based value of deliver this our continue cost we grew ahead Tiger and systems as efficiencies powerful share XXX a than network and Our expectations. of gained market the We supply challenges, impressive are to seeing scale market, customers. Lake of example our in an believe incredible in

shipping and Moving Customers CPU are are we center, volume ramping Xeon value be see Scalable the our to data first based will through now Ice first to and going XX-nanometer performance in significant quarter. Gen Ice Lake Lake PCIe edge Memory across and enhancements Persistent as workloads innovations generation next cloud, Express improvement X, with network, Intel excellent as SGX. such such and security Optane

to improvements are As of are excited and Alder to are data the both and our Enhanced Lake and customers. customers Sapphire we for Rapids the look with sampling for mobile we products desktop process SuperFin numerous broadly center. bringing architectural advantage take ahead, technology capabilities and we about PCs These

critical, a Alder for at discrete XPU big graphics half the but and the qualification of customers quarter graphics, front leap XPUs our XXXX market fourth in required we opportunity optimize discrete help production expanded and as qualify expect Xe-based to or market entered be are Lake Iris multiple We with notebook In we end production of volume us, for workloads. ramp MAX Sapphire Rapids CPUs Intel and of will first in the in Intel's specific Xe begin had will We XXXX. the desktop second the GPU. of architectures

which our delivering discrete the are is thin and we notebooks and great center, experiences We GPU Dell first already Asus, and customers Tencent. discrete cloud for from now as graphics into data for gaming shipping introduced light such Acer,

gold the experience of programming developer announced unified also our open standards-based release We that a delivers architectures. oneAPI, cross-industry common model across

reach accelerate our Second, we've extending growth. made progress to our strong

network made past for our have capabilities we expanded technology we and also AI performance autonomous on accelerators position our growth to XX% the to years for than and the prospects been wireless, AI goal key XXXX. drive GPU-based and custom In Xeon machine ECX silicon several we winning networking We've to target. learning network solutions PCs eight this silicon. $X XG reaching our inflections training that that intelligent the XG deliver price approximately edge. designs enterprise, our instances our and the we are workloads. the footprint the current tremendous to We convergence of see infuse Intel and our build up transformation, two of as revenue instances station base Over significant Network cloud provider versus AI, in into up Radio we into such better of networks of leverage XX% ahead have and delivering and to in delivering leading making billion invested workload FPGAs, training XXXX, investments step Access XX% quarter Habana to Xeon lead SoCs, make original a share, us year, in Amazon from We years, cloud everything as ECX Intel complement data center in we Gaudi will this when inference. strength AI announced up positioned for Today,

lead we intelligent of have Finally, the assets enviable explosive computing. and to autonomous growth edge

Mobileye annual and IOTG exciting revenue a of fourth billion. explosive had a start a have $X to and businesses Mobileye combined of record delivered XXXX an announcements. CES quarter number with Our

than than allocating initiatives, we our from more manufacturing $XX more spending maintained of XXXX, higher revenue, in our portfolio. more and capacity Third, to grown by of have R&D We've product XX% adding targeted billion our driven while than revenue in revenue we've to shareholders' $X EPS. doubled growth of investing capital. expansion, thoughtfully Since focusing discipline and XX% billion

and $X.XX $XX.X from $XX the returns share. announced buybacks, anticipate included we've that substantial we share dividend over the Building in in McAfee this, At share annual increasing result, dividends exits a and per or latter a $X.XX of through are alone proceeds from delivering by today, including we been on repurchase X% our billion accelerated shareholders, in our time, capital to which time. announced we to same $X.XX billion approximately NAND $XX As XXXX billion August.

want details on deliver the Intel for results, build and as enriches time of watching I reiterate of spent planet. at the I quarter progress pass continued that the engagements that the more to our over our it and they proud Intel's lives the I and more investors fourth our couldn't I've continued I for on team valued today technology be here. I look everyone Pat purpose for breakthrough their on George to line Before and forward to on support the years. to team's cherish analysts thank also of I the Intel

George Davis

Ice led contributions exceeding good our stronger revenues demand due our quarters. was finish stronger record performance above and year. revenue enterprise afternoon QX related ICAP flow led $X.X EPS XX.X%, to notebook margin much by segment cloud from our a guidance achieving expected end. of higher qualification gains achieved than QX demand points from a Gross exceeding strong PC-centric Thanks prior was and and portfolio. center billion, NAND. The on Both Lake benefit everyone. and expected Bob and revenue stronger in broad based to through $X.XX three revenue the billion. the to $XX and beat was server QX further to our was Mobileye marked by year and operational due with Data guide by boosted also guide for government. to than production $X.XX, quarter by along desktop record

one-third operational two-thirds below of the Excluding a our tax adjustment, one-time line. was about was beat EPS and

acceleration year-on-year XX% year cash January In total, year-over-year and announced October billion shareholders. XXXX $X.XX, XXXX, billion, returned higher We Day up generated part to $X.XX XX.X in have XXXX. relative our repurchased record $XX shares in share January planned than billion higher was year EPS our guide. we billion of of our up than XX% $XX.X XXXX. complete $X.X one billion a of which to target. $XX.X and the QX we flow, full Investor cash balance reflects $X.XX $X.X flow repurchases revenue For guide, free billion achieved as approximately remaining intend free to of We our

data down expected. in and lower segment XX% of digestion record than In group XXXX, enterprise cloud by billion, DCG revenue generated and delivered Moving $X.X driven up the weakness QX, revenue performance, briefly XX% government year-over-year our year-over-year. albeit center

tough all operating As a a was and investment. in $X.X DCG lower strength compare revenue segments. an revenue across year-on-year margin increased QX record XXXX down with was for reminder, QX all-time with billion on

Our other year-over-year data largely XXXX. these year-over-year due effects partially down QX, IOTG businesses demand. by offset X% was year-over-year, centric businesses COVID in X% impacts, up COVID-related were driven demand growth. were to by Mobileye In on XX% revenue down

on in XX% demand was by X% revenue expect X% saw both the ASPs, CCG margin million, straight segment. $XXX in billion, was of XX% segments. the down volume $XXX the video delivered million. in recovery record year-on-year revenue sequential year and at XXXX PSG up We year-over-year revenue fifth down IOTG and as was $XX a was key stabilizing mostly offset records in NSG continues $X.X accounts Operating on strong. higher of and year-over-year. lower ASIC to up XG margin growth. partially revenue, be operating quarter year-over-year due to transitions Mobileye communications growth was in industrial million quarter IQSoC

$XXX offset Operating in to products. down notebook X% gateway increased higher was record volume year-over-year ramp revenue billion, divestiture quarter, entry by was partially For $X.X XX-nanometer business. million the on ASPs up year-over-year, Adjacency volume, consumer ramp and revenue our volume. up income down modem by the by XX% education of segments. down home XX% driven and was of were the unit due driven

longer and as said, outlook, time Bob role it assume into important to our Pat to before give is our believe to we plans. and full his announcing business guidance and year dig new Moving Trey the XXXX term

we discuss then high-level the outlook provide I our headwinds will and However, expect. tailwinds QX and year, for

outlook reminder, our NAND a the As XXXX for excludes business.

desktop PCs down $XX.X QX, continuing year-over-year further The prepaid on in is NAND. in COVID estimate billion, excluding up corporate million to QX be XX% also significantly for one-time notebook X% revenue nature in year-over-year. digestion relates anticipate or volumes We and cloud demand We revenue year-over-year down to revenue of strong down expect expect and We impacts demand revenue a and approximately that arrangement. continued IOTG. QX includes $XXX see

of the XXXX. remainder we in the growth at year, core our markets in solid look we see TAM As

in eases first-half We digestion demand as to more expect expect COVID IoT the half centric center, PC concentrated than impacted weighted be normal data to and markets and demand enterprise, seasonality be data improve. as such and second more cloud

but product this strong in our a and have continued the competitive PCs have anticipated roadmaps, entry plans shift revenue market to We year. more mix consumer

year lower and year-over-year adjacencies. Finally, expected offset and Gross our Xeon approximately volume we higher core lower some improvements from is margin to revenue see mix-related on lower expected partially that be QX businesses four exit QX to modem this approximately impact will from operating by margin from by ASPs small XX%. is margin be XCC of XX%, approximately units our DCG in PC from business. divested points down

We approximately per to and Trey it tax With are rate of get of EPS forecasting let me XX.X%. share questions. and to over that, your back a turn $X.XX

Trey Campbell

you, Thank right. All George.

each one introduce to question. our Operator, caller. our would the please Moving Q&A, just normal participant ask is practice, we ask first now ahead to and on as go

Operator

line question with Muse comes from the Evercore. C.J. Our first of

C.J. Muse

I Yes, manufacturing clearly, good congrats first but fact, luck. certainly a pursuing working Thank question. of Bob, it the the best dual pleasure that and the question been it's strategy edge are internally both you leading externally. a made been clear at is final decision hasn't pretty taking yet, guess evening. and path sounds for Pat, of and a around you you with

about QX? you. that secure very design what Thank importing capacity you what higher intensity to impact Will foundry to investments CapEx? driving is to how have products that OpEx will need certain foundry impact think make is to different your in we rules, and and is OpEx with should So, the partner on

Bob Swan

George can Maybe and finish thanks up. you C.J. Yes, start I'll

number and an technology comfort progress effort months we X-nanometer exhaustive that yes, and last course of to our or that that our products middle technology. lot deliver we've XXXX in we of been which roadmap cadence year, was over the the our one we priority be through next-gen highlighted, would predictable six the of process a the a us iX leadership First, set that of as on made the we've using tremendous able gives

that count be of to the development the but our trade-offs that that has that are when realize we made outside. what XXXX the the the a disaggregated and one, back, continue with things team a also the enhanced control look that us have of few that two, IDM leadership And see we deliveries. our to progress so make technology -- at to our the can and future. we gives invest the majority So, designs three, which in capacity of that make have that customers we flexibility chain that given in technologies we'll doing product manner; roadmap, in it can supply the years launched has tiles and confidence the in us we advantage we'll economics; flexibility and the we inside, leverage At ensuring on our if time, will the same performance predictable or

architectures more more on course flexible IDM time So, designs. advantage our preserving in over being our and the while and the

George Davis

trade-off which it looks preparation to That's in the a re-direction on in thought generation way from was Pat of for to spending of the say, more company the wouldn't yes, roadmap. next we the would of Yes tie I of compared the in increase roadmap, Most the any AI is and between our our tied tools. manufacturing we're got spending going as decided C.J., what on increasing on spending, explicitly year X-nanometer be at much really to divestitures. we in I internally externally. or and that product terms spending Xeon pretty savings to inside the

Pat Gelsinger

my I after after see statements this in I great well the X-nanometers on was C.J., want joining that today. on this Pat, the is team said months. might the progress month, I as formal use formal me I on over of as time all this be with really be six we're my to foundry pleased be will but That shortly investors team just very on TD will in and of the to I and pleasure majority more but internally, that the affirm great a gives we'll to said a of I in I confidence if to we our And join the done the has job the middle the last capabilities increasing next comments as path deeper good take think very dig company overall, the specific now. call

C.J. Muse

Thanks so much.

Operator

next question Suisse. with comes Credit John Our Pitzer from

John Pitzer

going ask Bob, just margin. December around afternoon for the NAND that thanking of would March, I'll welcoming C.J. gross that the question, guys. gross you'd good margins, margin being echo me have Bob thought Yes, probably Thanks gross upside maybe the for I clearly, on into in leverage help all letting my question. his and given you a better get quarter. and that some divestiture guess significantly Pat to team. I accretive

you And that. Bob the March can more XX-nanometer to as cost about ramp. the guess I or George, quarter, about gross the you we if address and from puts talk sides think should can importantly So, takes on begins to how margins

George Davis

again seeing it. is John, QX, seasonality. Hey, This I'll really what George. we're is atypical In take

our impact digestion that you So, affecting significant a that that's look mix when of ASPs. a phase quarter third at in we're in actually has we're the the it; on and fact

devices. into above continuing first contributing core small strongly demand PCs, beat tremendous the half well in QX expectations, seeing to actually and type also we obviously, You're in the think our QX, that's largely and continuing into

well. we So, effect have an ASP as there

seeing We also outlook pleased NAND talk gross margin than we're for some getting the savings so progress It's are our we're making about, -- costs impacting as and we and but with as higher benefit there more we are we're XX-nanometer seeing expecting. that. more you in X-nanometer from costs accelerating, even actually were

in to going are have client into we CCG overall. we going we're take to go full on but think weighted, the to in terms particularly into we to more full come from about we DCG you can go back from trying it, with impacted off of be going year and year, the small higher which tailwinds volume, compare The extrapolation. difficult half heavily core. full headwinds is mix and I think on going is see a the to gross As a impact for when to QX and that margins first year to a obviously, We're outlook XX-nanometer continue as makes year, ASPs both of you

I data ASPs, will center, a think pressures DCG going in. to but cost coming think on of be competitive with more is there think we continue be story to really I on XX-nanometer

Although for on inclusion we're as impactful Optane margin of on be XX-nanometer, it saw the CCG as year. have impact so won't maturity last then further And a we of will bit of little DCG, can as course with of the much along expect you well.

and full still on margin, tailwinds but XX-nanometer the the are down we'll NAND, divestiture us go should sale all guide the So, when in in detail of that business, into that modem, ramp more of help obviously year. look improvements our the very on strong, we gateway tailwinds gross the

Bob Swan

indicator said margins ended put maybe John, go for and of XXXX XXXX would think I'd up a gross at you that provided Yes and I we here just XX% back good be reasonably commentary year, would history if as a -- the XX.X%. for I and we George

if thought of So, look at half and and fundamental X.X down that the points at versus you point the we drivers year. what the of beginning a a

thought. we generated billion we $X more revenue First, than

my when volume was in at you beyond. was was important then mind, that XXXX and that it volume, for of good it and So, things all things look -- foreshadow makeup much the higher

products higher First, we was much was XX-nanometer our that gross the greater income, slight degradation expected positive in margin. demand of for than terms but was -- and -- in very

the education. fourth charts, Second, relative of experienced share the was came were course the the we were the the gains that at we the with to PC predominantly where year year entry in including what quarter demand which consumer believe of and beginning during we off

strong capacity real but we to be segments So, constrained gap demand margin, were didn't when was fill and tend year. last those the that that two lower we

much going the commitment and ends, ago. were the be number is relatively to better of that percent, have be of are one. lower-end. we more of the margin will drove a and going because year. at terms you're fact, more as that, At those mentioned demand mix than lower less time, going be positive degradation. course year. George three of it's very big -- to get mix X-nanometer going of the has mentioned, in dynamics at to to demand equipment. down a Number XX-nanometer of into think be more to better going Number George XX-nanometer we we think go those NAND, will things into PC to XXXX going we but income and the our but mix lot modem lower three, are same Education a of And a George be TAM the fully the things cost, expected as of renewed strong, depreciated do during two as a one much in that we margin have PC Those I things much So, technology issues, to product XX-nanometer, process part is is that year believe flagged going more exit the two, those

in our very impacts end lot consumer our as and first were generated we so and XXXX. quarter ways, So, many see in the products go in more we you'll and throughout of positive trends XXXX income -- those XX-nanometer as for in and better the adoption earnings lower revenue a of

John Pitzer

a great explanation. Thanks That's Bob.

Operator

question comes with Joe next Morgan Stanley. from Our Moore

Joe Moore

kind XXXX July, be progress I look if the XXXX. of granular know, comments too you at having you about still the the X-nanometer track drill the but July X-nanometer. If back -- seems early it had I late that client first half about big on wonder we I about that timeframe, a you. would on I don't right down talked could make on from of thank in you output? the first first still difference. want Great, product for your versus Is like Are XXXX talked

Bob Swan

XXXX after challenges server we with as the that. time were go normal into and expected the given will process we will first and in likely at quarters a product effect, think we that couple dealing shift I client the Yes, roadmap, to go said

our XXXX, of about in talked we is in we dramatically expectation predictable our schedule have X-nanometer the improved improving can time. that cadence we in ability focus product roadmap products that so So, hit in at leadership confidence our hit that the to that

Joe Moore

the Thanks all for congratulations and last years. your helpful. help thanks very and few much That's very

Bob Swan

Thank you.

Operator

Vivek question Bank Our comes next of with from America. Arya

Vivek Arya

congratulations taking my and and band. Bob to wishes question and for best Thanks

get saying and One next their products Intel a node XXXX. the probably X-nanometer if my have X-nanometer by ramp bigger be node you're still ahead. XXXX, will competitive TSMC to right foundry will by is year, of much ramp planning will one is questions to

curious that competition does two the of you to because Intel get three trying what do several to with capability kind to still foundry I'm ARM-based to progress. making were your So, or need X-nanometer, leapfrog or years match is in capabilities

a to So, to of what I'm state Thank get competitive conceptual think play just is you. kind of trying we when XXXX? to

Bob Swan

the least required the security technology that to as on leadership software important, two things becomes about architectures, but it's multitude only AI on to graphics to the factors. last we've Vivek, first, be about our over packaging bit process dependent memory, last and is you'll increasingly product those XPU this a very thing. and deliver leadership of time but going not or not delivering of pillars of very six in talked technology remember including belief a Yes, talked our is we a over years, Process multitude technologies but CPU and important of and important, is products capabilities, where couple mind,

been going the that's to couple for So, years. the of of But strategy we're technology. last secondly, invest kind we've process in on to continue

made yes, the So, couple is of X-nanometers process for progress last the of some quarters next on over the technology. important of generation we

deliver process in generation invest also our next will technology continue to leverage we to product, of we leadership as six So, pillars technology beyond X-nanometer.

Pat Gelsinger

couple Let is points of to me just Pat that. This add again. a

we what packaging, broaden the intent software, family use in that external, and leadership our but majority Overall, product marketplace in all is of that's technologies is that believe are will to and said, we well. of a be will internal competitive it our leadership we as we we timeframe that marketplace confident across our our As is we foundry said, of as categories. use the and building about product product as increasing on in the the major be Bob do the can capabilities a X-nanometers, across deliver

to we Also being the external that's Additionally, we we're interested combination an believe meet right in gaps in requirements right in leadership we're see to for of innovations capabilities TD gaps, resuming deliver unquestioned leveraging external not meets coming I to pleased long-term all very and we and competition deliver as of was our to work have foundries long-term. process striking by supply our customers' closing the are of customers' unquestioned internal clearly marketplace some interested the we these the also position that out as capabilities, believe commitment. with the requirements leader any of the model, right product between IDM balance that external just our and and have able ahead and internal to we of close which the as leap of our in technology well with doesn't

Vivek Arya

Thank Pat. you, Bob,

Operator

comes Our of Ambrish BMO. from next Srivastava question

Ambrish Srivastava

you had argue, of you, with a at opportunity Intel challenges wanted from which in to believe Hi, from the versus VMware I appealed inherited read and very enjoyed in you a and everything especially question you what much, the look to has just opportunity get Pat Bob earlier. successful very thank and you. your you really when at I but, this could had interactions feel before. at did even Bob. you, press, stint if my for really looked light I I don't the Thanks, I we

just So, can you help that which and the back again of understand and what us the saw, are kind got opportunities the by you challenges role way. welcome to you this

Pat Gelsinger

their and is is great a be, as Grove, grew said I much to the would with and these comments very that general people and privilege I learning of you I company, are Noyce, up feet thank honor right one this years one at history said, company as as and that Well, a great company, have part me, I of it a back to dream is, this my an Moore, job. really come to just few XX this

a for and in Second, to unquestionably help to and this technology to leadership America opportunity position. This the States a technology national me for it's Intel and healthy is needs asset. company to industry in be put United technology the an

the again. through best were and that challenge involved forward established of questioning after company where confident be this back of from and very more companies were this well the do economic wasn't days to the period and than before on front time in in diminished we've necessarily, part come period at the here, to come ability exciting that the we calling were and with many through the where enjoying the in and to they in very were as had of its but the we cycles, periods great the late of and part right at successful I was we I Great clearly, look and that to the turned that. marketplace It to multi-core I XXXX is periods the stronger, me able XXXX, very opportunity ever to looking strategy VMware, the And the and role I'm was position time period me a better, company out closely behind we yet in of cycles to the where be are to that and I am Intel now, around also the with has leadership in my a and opportunity So, opportunity that excited say of their Personally, by and was together. into be was that company Board has alignment the I to come I'm and timing the opportunity unity the of see ahead those Board it laying bring working we're that. back as others. enthusiasm back difficulty in periods gone company company believe to and as I capable unquestionably and Intel where forward

Ambrish Srivastava

Pat. Thanks

Operator

with question Our Stacy Bernstein Research. next comes from Rasgon

Stacy Rasgon

was my the Pat, initial a taking point that which time, to question in all looking then was address the welcome for the I've looked massive X-nanometer same got the the your to a room from strategic little shifts. it at period to understand year track, perspective great wasn't Intel, for the I'm to for it Thanks potentially telling a and considering is elephant here. glad of Pat at you of guys. sudden, going of I us and it on to But short X-nanometer say bit and on Hi see time. company that

I but think a So, about potentially that also future confidence given now that XX-nanometers, really last that seen guess do around look both things at you as several this brief XX-nanometers point I we've into like just after the should the the problems, you how how guess that are can the given and What at manufacturing, and are you've what have current on on how track. that where we've especially like we seeing they process confidence investors we and we since get confidence? had and nodes feed that how risks sounds sticking you're it nodes total gives the it X-nanometers,

Pat Gelsinger

say also this Bob Well, have the been that last working for on months six team and would I diligently. the

time say data, decisions resolved a time investigation little that more we'll just that's same more decisions been been has had her analyzed, it analyze I'm my as we they after point making has bit looking everything over the be with I've pausing, said, was to that give at role. me of into more that came we them right, on time, looked the like that At the is is to So, were. doing giving days, even that six a I trends for. job near a future bringing and that though last and we're into to the Ann really to been a leadership. Also, clarity to the adjustments confidence greater to to understand I dig the those same team roadmap thoroughly great of few team at the clearly deeper data months moved carefully. in

is we're the into be teams come leadership that on. making going to where about roadmap We're the our development well excited talent adjustments as You'll of company. we're in seeing product the

of favorites You you'll have announced key we and my be when company one might of a was leaders back seen Glenn new seeing here announcements in absolute I other just fellow the back, coming coming coming to back Hinton in.

us that analysis, us the to I has with decisions solid expect we'll of great to great a has So, more be is I merited Intel this that put had think team the the getting job a weeks the point. to very doing on and leadership, few past. been the that path the allow making foundation roadmap, in a company

Stacy Rasgon

it. Good luck. Got

Pat Gelsinger

you. Thank

Operator

JPMorgan. Sur comes with Our Harlan next from question

Harlan Sur

and all Want back past group the welcome Bob, the the contributions strong years. the afternoon. the solutions access and Good networking few support year was data they networks. customers of the core last into Pat large thank center connectivity your XG radio ASICs, over to for and as Underlying you continue performance to Xeon, the of team to virtualize continued their provider and service parts of penetration

I year. data think to center in the last adjacencies drive XX% this helped growth

billion mentioned. you networking segment was Your compute $X and XX% up as

networking where market. networking competition continue segment? to this you double-digit in I and it to year, this owns starting the see does guys fast-growing year think a xXX given compute CPU up the of profile compute type stepping see of So, XG been just server Are a has continued this in build-out the segment the XXX% Intel segment still for share growth team

Bob Swan

for the question. Thanks

view of You and dumb play we as to smarter pipes. and smarter from the a gave of as couple compute years I we've in first data cloud answer and opportunity most moves network transformation we last for more your us significant role those for saying the network center XG the become inquisition. to the been is my mean, expand to more pipes that and the

and large space purpose purpose progress but allowed in custom the environment of your business for source moving with FPGAs to a growth ago last a bigger compute, us and role five compute years big could leveraging focused been that key We've of happened network a the our the custom-oriented GPU a has customers' thrust expanded tremendous more and the with general we has for also that radio $X -- made us several more years to year. architectures this That compute that included pretty to couple billion environment, by for we've So, a years. a we into in the and general as thought migrating from network and $X primarily a ago access probably question, play technology came or ASICs core billion six the been in while. play on emerging but and more much we a role at that to been success including that last

So, and I by in we hit we've think XXXX point that would about share I that -- gone maybe that XX% one targeted radio XX% XXXX. space other that that we share make access in

bigger. expected. partnerships is way including we well space the much XG we're the along where with network and we The VMware. So, of play We've developed ahead in at this role

more complementary to and partnerships those imagine us as to and edge. only more capabilities moves play the to can I will So, network and bigger and a allow compute role the bigger

Pat Gelsinger

said, driving Bob and strategy I pile role partnership the Bob at might I struck I as a if and when had I've one, was my this been XG And had VMware. in VMware to on

will absolutely this So, important XG it's becomes in redefining with is but to going vertically-controlled represent powerful versus XG well. horizontal it the that quite This smart environments a industry private computing, technology; it also even opportunity more platform cities, be open at will factories, actually that deployed is is one is as enormous, a smart because Wi-Fi. it up I'm edge a will XG displace intimate and is is it a than

all in in never it source very of important aspects future. distributed past, establishing So, revenue a a not in only but the is major beachhead a market Intel forward computing that the was is redefining of

wired established the we'll a that and with XG This one up is just faster come. it be next established better is many, here seen LTE, will we've one is that as position isn't many new leadership that's leadership the this and be truly been never is harvesting So, markets increased today already harvested decade connectivity, security, will network for capabilities, before. for years bandwidth, to exciting than and open position

Harlan Sur

Thank you insights. the for

Operator

from Our with Matt Ramsay Cowen. next question comes

Matt Ramsay

interactions your afternoon I Yes, question technology. with governments back, welcome one picture on of several your the I Pat, U.S. hugely of what in Intel? my thank previous very to you is answers that yourself, in the Pat, that secret much bit one how this for have government, had in make Good question little Pat, No Board's Omar come support much. those and -- home. direction, Omar, long-term success guess the competitiveness everything. to mentioned that the thanks to your is cetera, the Intel's and guess of that et to decision Thanks. like Bob. and been about wonder, critical is Bob conversations a to and and what you go pillars bigger in decision change I decision influenced and Israeli the CEO and of a government U.S.

Omar Ishrak

one. that take me let Well,

to of partnership like make anything decision. in that right First no all, felt we looking move Board and real a which in or this the process, was at time Bob and are the influence there was we with that the has government this planning succession

to what Pat level this he we're process take this we're confident So, our have company part us and to of at he's and join was and next regular saying the thanks Bob delighted for can just as been done. he's to this time

the than no planning Board motive So, there succession have. does the was process regular other other that

Bob Swan

increasing -- and large trade the the bigger years And of a our question more the China then about the increased would government tariffs, that were kind but At for saw to discussion on I been a was play West event and is us years about ago, talking specific now we've big this as a the an with challenge an saw opportunity dynamics a of versus for opportunity maybe also think just trade a implications for time, and of market a couple fronts. we increasingly role in U.S. I opportunity of foundry XG. or on couple the big of we us, world, two In East capabilities, because just restrictions. the

chains the So, think that an the same team space. tremendous investments talked we growing talked XG addressing our made West I dependencies on result incremental supply in of we've about where your are progress world more versus the and time, about and anxiety as At all we made, a also East about East. in a there having technology increased the dual need has

So, really we U.S. three to and greater here increasingly and those that commercial what meant for us access the here supply both those a in only government chain commercial safe here advanced three check U.S. what the government heard U.S. and the government increasingly boxes. is exposures customers, with that and we things, company the can players we've advanced their we're secure with in engaging microelectronics both technology one, anxious from and about the was need and need and We industrial who manufacturing the with all need just were manufacturing U.S. with base in this is U.S. and U.S.

dialog provide would the told to a technology forth have with to that players' the for the we do while that to, we good requires played has very been and role closely can the for U.S. a good back USG and services the the and for we've both And Intel, and ourselves be Matt, commercial we that a needs. foundry competencies, in as and Semiconductor along a both our know, think the how needs industry, been for some position services in scale, we U.S. Washington our the that country, good field foundry in make foundry do effect playing we job U.S. Industry working incentives of you government way, because the would the of leverage in in effective to trying capabilities services Association coming government a more we shape the of here of the invest the out be frankly, So, of in to that then that's sure leveling

Matt Ramsay

helpful. Thank you Bob. was much That very

Operator

UBS. Our question Timothy with next Arcuri comes from

Timothy Arcuri

process that well. than basically had an just a you think a on ago, was it I outsourcing guess month question I I from the a you that quite think you a where maybe ago had something is shift I versus possibility about captive that foundry you sort of rather actually interview and just license wanted about licensing a Pat could be the tectonic do a and is said just thanks. guess this? on that, you also was table possible foundry Thanks. to the Hi I foundry talked would strictly this And broader to six as or weeks Bob phone, to that's as mean is maybe you remotely on that. yes, it I since ask

Bob Swan

Well, I'll be a little more generic.

of to the development predictable open way that how focus is much advantages, products, be invest is I a deliver leadership technology and our preserve think ecosystem along company or you to a said have in understand and sure IDM I more and out do what cadence and as the on extent better the product they not technologies than the be with as we inherent performance might differentiation. we determination the critical are what engaging embrace there technologies in make that of

So, that well. they and use mean that have have could may we broadly technologies that with others much more said, holistic as ecosystem the that technologies characterized developed what or use leveraging speaking, we've a we way is in engaging just sharing that can that

in and all we goes we we think called money IDM model manufacturing, we design, this the very just do that's business XX we wonderful make I we advancements years take co-optimize, can an and an the leveraging the industry to engaging made dramatic business ecosystem it model evolve where -- chain, that's minded those. do where powerful and how supply open that over and last we be how think control in So, more back

Pat Gelsinger

the happen on clearly in tool I of that it will has leading also industry. the the to closely us to CAD the but products, that products the topic that I a participate with but innovation to leadership would suppliers, work fundamentally forward more the that other company, certainly the consistent the inside discuss category Also with industry suppliers, as model, of right, will sometimes technology best ability company. a in. that be to just every innovation for equipment go this in to that we're this We're be our we committed and sometimes may add committed we'll committed IDM sources we're basis and company, outside leading delivering the customers And

Timothy Arcuri

Good Thanks. to luck you both.

Trey Campbell

at here your just call a seconds for you you. end the to leave to that. maybe Pat, we And do give a priorities minutes going thank out give few and the you to few Yeah, just frame I'm as

Pat Gelsinger

category Bob and and formal you'll where and company. to is home comments products, you, Four my that Bob, being come to thanks the me. to to come the in for incredible my participate. back into thank Trey will dream right, on that up that in briefly as job be thank we have One is Great, you, see the we areas really and me focus on again I that great every touched leader vehicle simply I deliver

culture, industry. innovate execution, to to radical and that we'll customers best; details, we're chain machine is going a vehicle supply products X-nanometers a that leadership partnerships the us coming more us and but roadmap I our to does sovereign their best; into technology is to for for the front more deliver me transparent to the for this fountain, and digital this this company technology the world priority a online you Then, we these of customers, every nation the of and but of as have our products convinced on doing source, and maniac going a rebuilding and taking responsibility, more regain of the execution, driven our that that will that it Grove dive that. we're days is and duty, part the be model, we the all finally I'm me joining across greatest And for Grovian areas, I of a deliver. and is out is that trained find opportunity with be priority areas strategies the as a foundation have rely with because for data best our confidence feet We'll us we of humanity build they future. of development obviously, And Intel, for aspect looking uniquely be we delivery and innovations look is continuing the our their role. to was to and for Thank build beyond, IDM said, have culture a continue in that the Innovation, the see as coming You'll on and consistently that continual digital for the are can as today. at to for the company. industry

Trey Campbell

call. ahead Pat joining you Thanks all and the thank you please wrap for go Operator, us. and could up

Operator

call. you conference gentlemen, for this today's Ladies concludes and participating. Thank

now may You disconnect.

Intel (INTC) 22 Jan 212020 Q4 Earnings call transcript