In another disappointing quarter, Intel loses $2.8 billion, down 36% from the previous year.

The first quarter of 2023 financial figures have been announced by Intel, and the numbers are not good: the company’s revenue was $11.7 billion, down 36% from Q1 of 2022. Intel suffered its worst loss in company history, $2.8 billion, as a result of the fall in revenue. The company’s two largest segments, client computing, which sells products to consumers, and data center, which sells server equipment, both experienced declines of 38 and 39%, respectively.

If there is any type of bright spot in the earnings report for Intel, it is that this quarter’s performance was a little bit higher than anticipated; three months ago, Intel forecasted Q1 revenues of between 10.5 and 11.5 billion.

In order to reduce losses, the corporation has implemented layoffs and reduced executive and management pay. Moreover, it has discontinued some product lines, including its Blockscale family of ASICs for mining bitcoin.

There has been a significant overall fall in the consumer Computer business as individuals continue to utilize equipment they purchased during the epidemic. Some of Intel’s issues are hurting practically every firm that manufactures PCs or PC components. PC shipments are down over 30% from this time last year, according to IDC analysts. A surplus of memory and storage chips has caused Samsung’s revenues to drop by 95% recently. In recent quarters, businesses like Nvidia, Micron, and even Apple have reported revenue reductions.

But, some of Intel’s issues are distinct. The company’s long-delayed line of next-generation “Sapphire Rapids” server CPUs is a significant one; it has given AMD its greatest shot in years to compete in the lucrative server CPU market with its EPYC chips. The fact that profits from AMD’s data center sector are helping to offset decreasing consumer demand for its CPUs and GPUs is one reason why the company’s most recent financial results have been a little better.

Additionally, Intel’s Arc GPUs debuted months later than anticipated and were limited to competing with less profitable entry-level and midrange graphics cards from Nvidia and AMD (they also had lots of driver problems early on, though those have gradually improved). Since AXG was disbanded and incorporated into the client computing and data center groups, Intel no longer has a separate graphics division (AXG) that reported its revenue separately from the other groups within Intel. As a result, we are unsure of the financial success of Intel’s GPU initiatives (or lost).

By addressing these execution issues and allowing other businesses to use Intel’s foundries to produce their chips, Intel is attempting to turn things around under CEO Pat Gelsinger. We’re still waiting to see if the so-called “IDM 2.0” plan will be successful despite the fact that it was first revealed more than two years ago due to the lengthy lead times for chip engineering and production. Although the company’s income from foundry services decreased by 24 percent year over year to $118 million, it still represents a very small portion of Intel’s overall revenue. Gelsinger reaffirmed in Intel’s press statement that he saw this sector as a “$1 trillion potential” in the long term.

As one of the most important measures we are doing to execute on IDM 2.0, we are prioritizing the investments required to advance our plan and build an internal foundry model, according to Intel CFO David Zinsner.

Next quarter is expected to be even more painful for the corporation. Intel anticipated Q2 2023 revenue of between $11.5 and 12.5 billion, a significant decrease from the $15.3 billion the company reported in Q2 2022. (which itself was already a 22 percent drop from Q2 of 2021).