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Some other things I noticed when I read their earnings call transcript from the other day: "We'll start with a focus on driving $3 billion of cost reduction in
by davedx 4y ago
Some other things I noticed when I read their earnings call transcript from the other day:
"We'll start with a focus on driving $3 billion of cost reduction in 2023, 1/3 in cost of sales and 2/3 in operating expenses."
"best-in-class semiconductor companies have a financial profile that includes gross margins in the 60s" (Intel's is in the mid 40's and fell last quarter)
So they're not only trying to change a gigantic part of their business model, but ALSO drive $3B of cost reduction and try and push gross margins back up to... where they were 5 years or so ago?
They're making it impossible for themselves IMO. Pivot or profit improvements, choose one. Doing both at the same time is surely going to lead to a huge mess.
- brookst 4y agoThe thing to understand about Intel is that the finance org has hugely outsized power compared to other companies. This is a company that believes that any problem can be solved with capital allocation, and no project is worth doing unless there’s a financial analysis “proving” it will add at least $1B/year to the bottom line. Intel’s culture is that of a cash cow, not an innovator. So year, profit improvements come naturally, pivoting not so much.