“We are interested in resuming this position as the undisputed leader in process technology, and that is our commitment,” Gelsinger said. He joined the earnings call along with outgoing CEO Bob Swan, though he doesn’t actually take on the role for another three weeks.
Still, investors seem to be wary. Shares of the company fell nearly 10% on Friday, although they posted better-than-expected gains on Thursday.
The semiconductor giant reported fourth-quarter earnings of $ 1.42 per share in revenue of $ 20 billion, surpassing the $ 1.10 in earnings per share in revenue of $ 17.5 billion projected by Wall analysts Street. Full-year revenue reached a record $ 77.9 billion, 8% more than in 2019. Intel also announced it would increase its quarterly dividend.
Friday’s investors may also have been reacting to executives of plans discussed during Thursday’s earnings call to get the company back.
Gelsinger and Swan suggested during the call that Intel is likely to maintain its own production of the 7-nanometer chip, although the company promised to provide more details about its manufacturing plans after Gelsinger took over.
“I’ve had the opportunity to personally examine progress in Intel’s 7-nanometer technology over the past week,” Gelsinger said during the call. “Based on the initial reviews, I am pleased with the progress made in the health and recovery of the 7-nanometer program. I am confident that most of our 2023 products will be manufactured in-house.”
Gelsinger added, however, that due to the breadth of Intel’s portfolio, the company is likely to “expand our use of external foundries for certain technologies and products.”
Outsourcing a portion of production could help Intel fill gaps in its product line as it addresses its manufacturing problems, analysts say.
However, some are concerned that there is none a quick fix, regardless of the approach Intel decides to take.
“Competition threats remain the main concern,” Bank of America analysts said in a research note Thursday. They added that AMD could gain even more market share at the expense of Intel because it outsources production to TSMC, which will convert more advanced processors by the time Intel’s 7-nanometer production accelerates in 2023.
“The world is connecting more digitally, expanding the market ahead of us,” Gelsinger said. “There’s a huge opportunity ahead for Intel, but in order to take advantage of those opportunities, we need to deliver the best products and stay ahead of our customers’ needs. We need to be more agile in a very competitive market.”