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pww.comIntel Corporation Presents at Credit Suisse 24th Annual Technology Virtual Conference, Dec-01-2020 10:00 AM - NasdaqGS:INTC

NasdaqGS:INTC

Robert Swan;CEO [Executives] 💬

During the fireside chat at the Credit Suisse 24th Annual Technology Virtual Conference, Intel CEO Robert Swan provided insights into various aspects of Intel's current state and future direction. Here’s a detailed summary of his statements:

General Remarks

  • Industry Context: Swan emphasized that the technology industry is experiencing an acceleration of digital transformation, with an insatiable appetite for data and a world where everything looks like a computer.
  • Market Opportunity: Intel sees a dramatic expansion of its total addressable market (TAM), moving from a 90% market share player to a roughly 30% market share player in higher-growth areas.

Three Fundamental Trends

  1. Insatiable Appetite for Data: Increased demand for compute, storage, and data movement.
  2. World Where Everything Looks Like a Computer: Transition from the PC era to a distributed intelligence era, where computers are everywhere.
  3. Technology Inflections: Key enablers include 5G, artificial intelligence, and intelligent edge computing.

Three Transformations

  1. From CPU-Centric to XPU-Centric: Evolving to meet the evolving workloads of the present and future.
  2. Beyond Silicon to Platforms and Services: Leveraging software and engaging more deeply with the developer community.
  3. Evolving the IDM Model: Leveraging Intel’s manufacturing scale and engaging with the ecosystem in new ways.

Execution Priorities

  • Capacity: Ensuring the ability to meet growing customer demands.
  • Rate of Innovation: Accelerating the 10-nanometer process technology.
  • IDM Model: Strengthening and evolving the integrated device manufacturer (IDM) model.

Manufacturing Strategy

  • Process Technology Progress:
    • Added 25% capacity in 2019 and 2020.
    • Improved 10-nanometer yields every quarter.
    • Launched Foveros packaging technology.
    • Made a step function improvement in 10-nanometer node performance.
  • 7-Nanometer Slip: Admitted to a slip in 7-nanometer process technology.
  • Future Strategy:
    • Decision-making process for 2023 roadmap:
      • Schedule predictability.
      • Performance implications.
      • Economics of internal vs. external manufacturing.
    • Expected to conclude decision in early 2021.

Product Cycles

  • Client Market:
    • Expectation of recapturing share in H2 2020 due to increased capacity and the successful Tiger Lake product.
    • High demand for Tiger Lake, with 30% higher demand than expected.
    • Expectation of a healthy PC TAM in 2021.
  • Server Roadmap:
    • Ice Lake: Sampling now, ramping production in mid-Q1 2021.
    • Sapphire Rapids: Sampling now, aiming for production end of 2021.
    • Strong pent-up demand for Ice Lake.
    • Robust ramp of Ice Lake and broad-based adoption of Sapphire Rapids expected.

Server Market Dynamics

  • Enterprise:
    • Strong demand in H1 2020, up 34%-35%.
    • Flat enterprise and government segments YTD through 9 months.
  • Cloud:
    • Stronger growth in 2020.
    • Continues to ingest through H1 and digest in H2.
  • Overall Demand:
    • Relatively strong throughout 2021 due to digital transformation needs.

Capital Deployment

  • Investment Levels:
    • Spending as a percentage of revenue decreased from 36% to ~26%.
    • Increased R&D by nearly $1.5B, excluding the 5G modem.
    • Record levels of CapEx and R&D investment.
  • Acquisitions:
    • Acquired Mobileye, Moovit, and Habana Labs.
    • Will continue to make acquisitions aligned with strategic goals.
  • Financial Flexibility:
    • Will use financial flexibility to eliminate outstanding share count opportunistically.

Closing Remarks

  • Key Value Proposition:
    • Expanding role in a world with an insatiable appetite for data.
    • Transitioning from a CPU-centric to an XPU-centric company.
    • Evolving the IDM model to co-optimize design and manufacturing.
    • Investing in technology inflections to drive growth.

Swan concluded by expressing confidence in Intel's future, emphasizing the importance of execution and the company’s commitment to creating world-changing technologies.

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