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Intel faces profit squeeze as turnround effort begins

Chipmaker enjoyed boost from PC sales but margins are under pressure

Intel comfortably beat Wall Street expectations in its latest quarter as continued strong sales of PCs during the pandemic made up most of the ground lost from weaker data centre demand, according to figures released late on Thursday.  

Despite modestly raising its forecasts for the rest of this year, the US chipmaker’s shares slipped back 3 per cent in after-market trading as Wall Street digested the company’s sliding profit margins and escalating capital spending as it lays the ground for an attempted turnround.

The results are the first under new chief executive officer Pat Gelsinger, who laid out an ambitious plan last month to put Intel back at the forefront of chip manufacturing, while also laying out a new strategy to become a chip “foundry” carrying out manufacturing for other companies.

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