Intel posts biggest quarterly loss as PC sales drop, chip wars intensify

Intel reported its largest-ever quarterly loss on Thursday, April 27 due to a sharp decline in personal-computer sales and rising competition. It's the fifth quarter in a row for the semiconductor giant when it reported falling sales and the second consecutive quarter of losses.

The quarterly results showed a staggering 133 per cent annual decline in the earnings per share. The revenue dipped nearly 36 per cent to $11.7 billion.

The company reported a net loss of $2.8 billion.

The Santa Clara, California-headquartered microprocessor-developer had reported a profit of $8.1 billion last year.

Why Intel, other chipmakers are on a losing spree?

There are three notable reasons behind the current plunge faced by chipmakers. They are the rising prices, a global chip glut and poor demand for hardware. All these factors have also become punishing for Intel's rival Samsung, which earlieron Thursday reported its worst quarterly profits in 14 years.

Intel'sloss and sales collapse was slightly less disastrousthan expectations.

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Intel is one of the world's leading semiconductor makersthat bring out a wide range of products, including the latest generation chips along with Taiwan's TSMC and South Korea's Samsung.

It was also affected by falling demand for chips that power data centresand is struggling to compete with Nvidia for the semiconductors that undergird ChatGPT-style generative AI, a major new and chips-hungry sector for the industry.

The chips industry, which also powers technology such as smartphones and cars, is well-known for its volatility, with demand and supply see-sawing with the dips and rises in the world economy.

Its central role in the global supply chain became clear during the height of the Covid pandemic.

Lockdowns and health restrictions diminished production out of Asia, leaving surging demand for chips unmet just as everyone turned online for work, shopping and entertainment.

Semiconductors have also become part of the ongoing geopolitical moment of reckoningbetween the US and China, with Washington urging allies to stop supplying China with cutting edge chips, further destabilising the sector.

(With inputs from agencies)

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