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Driven by demand for chips, Intel ended 2021 with records


was dominated by unprecedented demand and supply chain challenges”,”text”:”2021was dominated by unprecedented demand and supply chain challenges”}}”>2021 was dominated by unprecedented demand and supply chain challengessummarized Pat Gelsinger, the boss of the American group, during a conference with analysts.

He expects demand to remain just as strong and lead to a era of sustainable growththanks to a widespread computerizationwith artificial intelligence, connectivity of all objects, ambient computing and the construction of infrastructures that allow data to be processed between servers and various sensors, without going through computers or smart phones.

Extreme demand for semiconductors

A man wearing a mask speaks into a microphone during a conference.

Intel CEO Pat Gelsinger

Photo: Associated Press/Vincent Thian

The company raked in $79 billion (C$100 billion) in revenue in 2021, above its forecast ($77.7 billion). From October to December, it raked in $20.5 billion (C$26 billion) – +3% year on year – but its net profit plunged 21% to 4.6 billion (C$5.8 billion). Canadian dollars).

The extreme demand for semiconductors, linked to both the digital transition and new habits during the pandemic, combined with production delays due to COVID-19, has led to a global shortage.

It affects many sectors, as chips are essential to the manufacture of many products, from smartphones to computers, cars and vacuum cleaners.

Pat Gelsinger repeated that this crisis will continue until 2023, even if he sees improvements during this period.

Intel invested heavily in semiconductor production in the United States and Europe last year, with a strategy outlined in March that relies on both expanding in-house manufacturing and increasing the use of contractors.

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2025″,”text”:”The problem for the group is that the deal with the United States to build a megafactory is very expensive, and they won’t reap the benefits until 2025 “}}”>The problem for the group is that the deal with the US to build a mega-factory is very expensive, and they won’t reap the benefits until 2025.noted independent analyst Rob Enderle.

Washington is sounding the alarm

The Biden administration on Tuesday urged Congress to pass legislation to help US manufacturing of essential products such as semiconductors, pointing out that manufacturers have seen their reserves dwindle to worrying levels.

President Biden holds up a plate of semiconductor material, seen close-up.

Joe Biden, during a meeting at the White House last April, brandished a plate of semiconductor material, which is used to manufacture electronic chips.

Photo: Associated Press/Patrick Semansky

Such a law would be providential for Intel, but the political negotiations are slipping. Passage of the text will be difficult during an election year, when the two American parties are at war with each otheradded Rob Enderle.

Pat Gelsinger was nevertheless optimistic about his chances of success, especially as Washington sounded the alarm.

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The Commerce Department conducted a survey of manufacturers including automakers and medical device makers, finding median inventory fell from 40 days worth of supplies in 2019 to less than 5 days in 2021.

If a wave of COVID-19, natural disaster or political instability were to disrupt a foreign semiconductor factory for even just a few weeks, it could lead to the closure of a manufacturing plant in the United States, endangering the American workers and their familiesthe department said in a statement.

Record sales

Intel’s largest microprocessor arm earned $10.1 billion (C$12.8 billion) in revenue last quarter, down 7% from a year ago . A drop that the group explained by an unfavorable comparison with the last quarter of 2020, where sales had experienced a record thanks to the pandemic.

Close-up of a microchip.

Shortage of semiconductors

Photo: Getty Images/Justin Sullivan

The activity of electronic equipment for data centers has increased by 20% to 7.3 billion dollars (9.3 billion Canadian dollars).

And Mobileye, its Israeli subsidiary specializing in self-driving technologies, brought in $356 million (C$452 million) in revenue (+7%). Intel announced in December that it plans to bring it to Wall Street in mid-2022.

The manufacturer of microprocessors also welcomed a decision by the Justice of the European Union, which on Wednesday canceled a fine of 1.06 billion euros (1.51 billion Canadian dollars) pronounced in 2009 by the European Commission against Intel for abuse of a dominant position.

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