During the course of the event, management stated that expansion of its small contract manufacturing business will prove to be a major factor in driving long-term growth. Until recently, Intel had used its manufacturing capabilities to manufacture its own chips.
However, this year, it signed up a couple of foundry customers and management now plans to open up for competitors as well. So Intel could now be making components even for its companies like graphics chipmaker Nvidia (NVDA – Analyst Report) and mobile chipmaker Qualcomm (QCOM – Analyst Report).
Intel launched two mobile chips from its Atom line with the high-end version named Broxton and the low-end version named SoFIA. These chips have been designed in such a way that they can easily interchange features and thus create different versions of the same component.
Management has shifted its focus toward low-priced categories. Considering the sluggishness in the PC market, this seems to be a good move to grab market share. As a part of its new growth agenda, Intel will focus on manufacturing chips for a few phone makers but with large sales volumes.
Intel intends to become more customer-centric in the near future, which means that it will manufacture chips keeping market demand in mind rather than trying to push its own designs.
The company’s focus on geographic expansion and addition of new customers to its existing sphere of businesses will help accelerate profit growth in the future.
Intel expects revenues to remain approximately flat year over year in 2014. Gross margin is expected to be within 55% to 65%.
Intel predicts the PC market to be down in low single-digit percent in the near future. Investments to help customers convert to Intel chips in tablets are expected to adversely impact profitability.
Management targets 15% compound annual growth rate (CAGR) for DCG (Data Center Group) by 2015, which will be brought about by an 8% CAGR in Enterprise IT and a much higher and more rapid rate of growth in emerging areas like private cloud, telecommunications and HPC.