Intel Cuts Data Centre Growth Forecast

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Data Centre group revenue of £2.7 billion, up 8 percent sequentially and up 12 percent year-over-year

Intel has slashed its revenue growth outlook for its data centre business, reflecting weak spending from its chip customers that install Intel products in data centres.

Following the £11 billion buyout of chipmaker Altera in June, Intel has been looking to its data centre business to offset slowing revenues for its chips used in PCs. Worldwide PC shipments fell 7.7 percent in the third quarter of 2015, according to Gartner.

Low double digits

But this week Intel admitted it expects its data centre business to grow in “low double digits”, compared to a previous outlook of 15 percent growth.

Intel’s data centre business is the company’s second biggest division in terms of revenue. The slowdown in growth forecast marred the rest of Intel’s results, which looked healthier.

“We executed well in the third quarter and delivered solid results in a challenging economic environment,” said Brian Krzanich, Intel CEO.

data centreThe company as a whole reported quarterly revenue of $14.5 billion (£9.46bn), with results showing “customer enthusiasm” for 6th Gen Intel Core ‘Skylake’ processors, said Intel. The company had an operating income of £2.74 billion.

Intel’s Client Computing Group revenue stood at $8.5 billion (£5.5bn), up 13 percent sequentially and down 7 percent year-over-year.

“The quarter demonstrates Intel innovation in action. Customers are excited about our new 6th Gen Intel Core processor, and we introduced our breakthrough 3D XPoint technology, the industry’s first new memory category in more than two decades.”

Intel made the move for Altera after a slow down in PC sales, with the company increasingly looking to expand in mobile devices, servers, and the Internet of Things to drive profit.

“Intel’s growth strategy is to expand our core assets into profitable, complementary market segments,” said Brian Krzanich, CEO of Intel.

Intel’s Internet of Things Group revenue was £380 million, up 4 percent sequentially and up 10 percent year-over-year.


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