The chip shortage didn’t stop Intel from having its ‘best year ever’

Intel is still feeling the burn from the chip shortage. It’s struggling to fully capitalize on tremendous pandemic-fueled demand for new PCs, because you can’t make a laptop with Intel chips alone. And yet that didn’t stop Intel from having its best financial year ever — in today’s Q4 2021 earnings, it’s reporting its highest quarterly and highest yearly revenue ever, at $19.5 billion and $74.7 billion, respectively — and four other revenue records as well. Profits weren’t nearly as rosy: net income went down 21 percent in the quarter and 5 percent year over year to $4.6 billion and $19.9 billion, respectively.

CEO Pat Gelsinger warned about other suppliers’ chips constraining the company’s growth during Intel’s Q3 2021 earnings in October when the company announced its Client Computing Group’s revenues had actually shrunk by 2 percent. Today, Intel’s Q4 earnings show things haven’t improved there: CCG is down 7 percent year over year, again due to laptops. Intel’s presentation shows laptop revenue is down 16 percent year over year because it can’t ship nearly as many of them as it likes, even though it’s likely making more money from each laptop: the average selling price of those laptop components went up 14 percent.

But desktops are up, and the company’s other divisions more than made up for the plunge (revenue-wise anyhow), with Intel’s data center group up 20 percent year over year to $7.3 billion. Smaller businesses like Intel’s Internet of Things Group (IOTG) and Mobileye (its self-driving car tech company) also saw more demand, up 36 percent and 7 percent in Q4 2021 compared to Q4 2020. They grew 33 percent and 43 percent this year, respectively.

In October, Gelsinger suggested that the chip shortage wouldn’t end until at least 2023, which somewhat sucks for Intel when you consider that the PC’s experiencing a bit of a renaissance right now. 2020 marked the PC industry’s first big growth in a decade, and earlier this month, Gartner and IDC reported that sales grew an additional 10-15 percent in 2021, with over 340 million PCs shipped, and enough demand that IDC analysts say it could have been even bigger if not for the shortage.

But Intel doesn’t automatically get to profit from all of that growth, and not just because of other suppliers. It’s also got some serious competition these days. The Verge’s list of the best laptops includes numerous machines that don’t contain Intel chips at all, but rather Apple and AMD. That’s not something we’ve been able to say many times over the past decade! AMD is pushing even further on laptop chips this year, and Qualcomm is throwing its hat back in the ring again too. It’s a rough time for Intel to be behind on processor technology, even if our first review of Alder Lake seems like it might help.

Intel does have some intriguing initiatives in the works to turn its fortunes around, including tens of billions of dollars in investment in more chipmaking facilities (such as its new $20 billion location in Ohio, which doubles as a made-in-USA political play for subsidies) and its own discrete graphics processors dubbed Intel Arc. The Intel Arc Alchemist is looking like a dark horse candidate to shake up the GPU market in both desktops and laptops later this year.

Intel will have an earnings call at 5PM ET; we’ll let you know if it says anything important about the chip shortage, or what’s next for the company.