Despite of economic crisis and rapidly declining sales of microprocessors and chipsets, Intel Corp. is very serious about starting production using 32nm process technology in 2009. According to the company, the new process technology will enable the world’s largest chipmaker to enter new markets.
“From an investment standpoint, we are absolutely prioritizing the investment that it takes to get to 32nm processor technology. We are going to get there as fast as we possibly can. That is what gives us performance advantage, cost advantage, and allows us to get to the higher level of integration that the future market we want to serve requires, the system-on-chips,” said Stacy Smith, chief financial officer of Intel.
According to Intel, with 32nm fabrication process the company will get a “great cost benefit” in terms of the cost per transistor as well as power characteristics that will allow Intel to target adjacent markets that the company is looking at. The company stressed that the vast majority of capital expenditure will be spent on 32nm process tech ramp.
“The predominant majority of the CapEx that we will spend in 2009, is for 32nm and leading edge process technology,” added Mr. Smith.
Intel reported fourth-quarter revenue of $8.2 billion, operating income of $1.5 billion, net income of $234 million and earnings per share (EPS) of 4 cents. The results included a billion-dollar negative impact from the previously announced reduction in the carrying value of the company's Clearwire investments.
For 2008, Intel posted revenue of $37.6 billion, operating income of $9 billion, net income of $5.3 billion and EPS of 92 cents. Intel generated approximately $11 billion in cash from operations, paid cash dividends of $3.1 billion and used $7.1 billion to repurchase 324 million shares of common stock.
“The economy and the industry are in the process of resetting to a new baseline from which growth will resume. While the environment is uncertain, our fundamental business strategies are more focused than ever. Intel will continue to extend its manufacturing leadership, drive product innovation, develop new markets and implement operating efficiencies that have already taken more than $3 billion out of our ongoing cost structure since 2006. Intel has weathered difficult times in the past, and we know what needs to be done to drive our success moving forward. Our new technologies and new products will help us ignite market growth and thrive when the economy recovers,” said Paul Otellini, Intel president and chief executive officer.