Intel Corp raised its annual revenue forecast above Wall Street expectations on Thursday, but Chief Executive Pat Gelsinger said the outlook for the chipmaker was still “supply constrained" and that it could take the industry two more years to catch up with rising chip demand.
Paired with a third-quarter sales forecast that just cleared analyst estimates, the results sent shares down 2.8% in after-hours trading after the results.
Intel, one of the few remaining companies in the processor chip industry that both designs and manufactures its own chips, has been able to weather the supply chain woes better than some rivals and is also working to build a business of making chips for others, called a “foundry" business.
Gelsinger declined to comment on a recent report that Intel is looking to buy GlobalFoundries for $30 billion to bolster its foundry efforts but told Reuters that he expects industry consolidation to continue and that “M&A will remain a part of our strategy" for building the company’s foundry business.
Intel said it now expects annual adjusted revenue of $73.5 billion, compared with its previous forecast of $72.5 billion and analyst expectations of $72.80 billion, according to Refinitiv IBES data.
Gelsinger said Intel could sell more chips if it could make more chips. Even though the company runs its own factories, it still faces supply constraints from its own suppliers of materials and equipment.
“We are helping them build factories as fast as they can," Gelsinger told Reuters. “But it will be one of those things that just takes a couple years to fully catch up to this explosive demand we’re seeing, and we have better tools to address it than others."
Intel expects adjusted third-quarter revenue of about $18.2 billion, only modestly above estimates of $18.09 billion, according to Refinitiv data.
Revenue from the company’s higher-margin data center business fell 9% to $6.5 billion in the second quarter, while its personal computing business revenue rose 6%, both beating Refinitiv estimates.
On an adjusted basis, the company earned $1.28 per share in the second quarter, compared with estimates of $1.06, according to Refinitiv data.