Intel earnings call: CEO Gelsinger remains 'confident' despite challenges ahead
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Intel (NASDAQ:INTC) Chief Executive Pat Gelsinger said Thursday that that while he remains "confident" about the semiconductor kingpin's business prospects, there's no denying that there remains a raft of issues around the world that will continue to impact the chip sector for years to come.
Gelsinger spoke on a conference call to discuss Intel's (INTC) first-quarter results, which came out after the close of Thursday's stock market trading session. Intel's (INTC) results topped Wall Street analysts' forecasts, but a slightly disappointing sales outlook caused investors to shave as much as 4% off of the company's share price in after-hours trading.
"I continue to believe we are at just the beginning [of a new innovation cycle]," Gelsinger said. "Overall, the demand signals continue to be robust in [areas such as] AI [artificial intelligence] and cloud [computing]. Semiconductors are the fuel of information."
Gelsinger was joined by Intel (INTC) Chief Financial Officer David Zinsner, who highlighted that impact of recent Covid-related lockdowns in China, where many semiconductors are produced, have been "relatively contained, and are nearing an end," but that it will take some time for supply chains to fully stabilize and products to get back on regular delivery schedules.
Along those lines, Gelsinger said to expect the chip industry to "see challenges" until 2024. Gelsinger said the Covid lockdowns, the economic and psychological effects of the war in Ukraine, only serve to provide more evidence to his belief that "the world needs more reliable and balanced" semiconductor manufacturing.
As such, Gelsinger reiterated his insistence that U.S. legislators pass the CHIPS Act, which is intended to provide financing and subsidies for chip manufacturers to build new domestic-based semiconductor manufacturing facilities. Gelsinger said Congress should pass the CHIPS Act as soon as possible in order to make U.S. based chip supply chains "a reality."
Gelsinger added that Intel's (INTC) plans to spin off its Mobileye self-driving automotive technology business in an IPO this year are "proceeding smoothly." Intel (INTC) has filed some of the initial Mobileye IPO paperwork, and the company has reportedly hired the investment banks it wants to oversee Mobileye's public stock debut.