Intel Corp has projected this quarter’s revenue and profit lower than estimations by analysts. The slowdown in China and inactive demand for its modem chips has been severely striking the company earnings. Tech giants including Apple Inc., Samsung, and Taiwan Semiconductor Co. have announced a sales warning earlier this month which drove to slash Intel’s shares by 6.7 percent in extended trading. The fear of a slowdown in the chip industry was slightly eliminated in this week when Xilinx Inc, Texas Instruments, and Lam Research Corp reported higher than estimated quarterly results.
Intel said it has been experiencing poor demand for data center chip business from China. The business has robustly strengthened company growth in last year when the company was witnessing decreased sales of PC. Bob Swan, Interim Chief Executive of Intel said at an interview, data center providers usually prefers large purchases, and finish with digesting the chips. This time, cloud computing vendors went wrong by bringing chips in markets earlier than ever under pressure of trade war between the U.S. and China. This move is entirely responsible to lower the demand and lower than expected sales in China, Swan added. While U.S. cloud computing vendors did not change their pattern of buying over the year.
According to the analyst Kevin Cassidy, the slowdown period will end after the second quarter of this financial year, when Intel’s data center growth potentially on track. As per our point of view, the cloud data companies are focusing to optimize the data center, the analyst added. Intel had been protected from strokes by Apple iPhone supply chain, as it was not a mainstream supplier. However, the company was the only provider of iPhone modems in 2018.