January has been a turbulent month for Intel, and consequently their fourth quarter 2017 earnings presentation has been one of the more widely anticipated in recent memory. Meltdown and Spectre would be the proverbial spectres at the feast, despite a focus on financial performance in Q4 2017 and earlier - i.e., prior to public awareness of both vulnerabilities.
Those keen to banish any lingering doubts over Intel's product portfolio will have to wait a little while. CEO Brian Krzanich stated that Intel expect new chips with in-silicon updates to address the vulnerabilities in Q4 2018, likely coinciding with the first mainstream 10nm parts. Although that will be scant comfort to some affected enterprise customers, realistically 18 months from the identification of in-silicon architectural vulnerabilities to a fixed shipped product is as fast as it's reasonable to expect.
Ironically, the twin vulnerabilities may result in higher revenue for Intel in 2018 as customers rush to update to fixed (and presumably higher performing) silicon. That will of course depend on the upgrade cycles of affected businesses and consumers. Meanwhile, Intel CPUs from Skylake forward have included the Post-Context Identifier (PCID) feature, which minimises the performance impact of updates that have addressed Meltdown via software or microcode adjustment.
In terms of financial performance 2017 was yet another bumper year. Fourth-quarter revenue was a record $17.1bn, and in the year as a whole they posted record revenue of $62.8bn. Full year revenue was up 9% year-on-year, with Q4 data-centre revenue exploding 21% compared to Q4 one year ago. Client computing performed relatively weakly, down 2% relative to Q4 2016, which was put down to a general slow-down in the PC sector.
Intel expect 2018 to be another good year, partially due to the 'reform' of US corporate tax rates which will result in paying an anticipated 14% effective tax rate next year (excluding one-off tax payments relating to the repatriation of funds from outside the US). As a result they are raising dividends by 10%, which has bolstered their share price in after-hours trading.
SOURCE: Intel Q4 2017 Earning Release, Intel Investor Relations
