There is another concern I have: When companies wake up to a correction like this, they often try to take the pounding in one qtr, so the narrative is we are bottoming now, and growth is coming shortly. I think Intel is doing that a bit with hits they are taking on the SR ramp expenses, and how they are accounting for inventory held (there were some comments about that but I didn't follow exactly what they were doing, this is in regards to product that wasn't fully "qualified"). So the depressed sales and GMs this last qtr are partly setting up to make Q3 look better than Q3 would actually be, sans the games. They may be doing somewhat the same on the client side, deciding to accumulate inventory and keep it out of the channel for now. They did claim the sell through by their partners was currently running higher than what the OEMs are buying from Intel, so they are burning down their own inventory.
But the wacking of cap ex by $4B, while claiming they would still hit their prior cash flow revision and the $10B down in FY22 forecast says things are dire for them. If the PC TAM is really down by 10%, and I'm assuming that is PC CPU only TAM, since Intel doesn't have much in the dGPU on client side yet, then that is pretty significant, because Q1 wasn't down much so the pain is in Q2-Q4. Intel would nominally have about 27B in those three qtrs, so nearly $3B must leave. Or course they took half that themselves in Q2. With sales forecast about the same for Q3, then the full 3B TAM hit could come only from Intel's hide in just Q2 and Q3 at that rate. Maybe AMD is fine?? |
