SAN JOSE, Calif. – Amid a brightening semiconductor market, Intel nudged its 2017 revenue forecast up slightly, buoyed in part by a slight rise in PC prices. It also boosted its annual capital equipment budget to $12 billion, a level it expects will continue into 2018, in part to support ramping 3D NAND and 3DXP memories.
For its first quarter, the x86 giant reported revenue of $14.8 billion and net income of $3 billion, up from 8 and 45 percent last year, respectively. A 7 percent increase in PC prices drove Intel’s client group, its biggest division, to $8 billion in quarterly revenues, a 6 percent increase. Intel's data center group, which targets high-single-digit growth, turned in a 6 percent revenue rise as unit sales fell slightly ahead of the summer release of new server CPUs.
Intel’s smallest units turned in its highest growth. Its flash group grew fastest at 55 percent to $866 million, followed by the former Altera FPGA group, up 18 percent to $425 million. The nascent IoT group nudged forward 11 percent to $721 million.
All in all, the PC CPU maker reported progress in its slow transition to broaden its base. It lifted its annual revenue forecast by $500 million to $60 billion, which would mark a new high.
Intel expects to spend $12 billion on capital equipment this year, up 20 percent.
The increase is “unique, but my guess is we may have to continue it for one more year or so as we build out that memory factory, but I don’t see it continuing,” beyond 2018, said Brian Krzanich, chief executive of Intel on a call with analysts.
Krzanich did not clarify whether he meant the Dalian, China, fab where Intel is ramping 3D NAND or the Lehi, Idaho, fab where it makes 3DXP with Micron. Bob Swan, Intel’s CFO, said Intel will spend $2.5 billion in capex for memory this year.
Next page: 3DXP breaks even in late 2018?
Intel nudged annual revenues up $500 million to $60 billion. (Source: Intel)