Intel results to test impact of supply chain woes on AI push

Intel investors on Thursday will focus on its efforts to sort out supply chain ​issues that have limited the company’s ability to ‌ramp up chip production to meet rising demand from businesses adopting AI-related services.

Intel has warned that supply constraints for its server chips that are ​used alongside graphics processors made by companies such ​as Nvidia will be most acute in the ⁠first quarter before easing in the second.

Intel is ​expected to report a 1.9% decline in first-quarter revenue to $12.42 ​billion and a near 90% drop in adjusted earnings per share, according to data compiled by LSEG.

The company’s data center and ​AI segment is expected to grow 6.8% to $4.41 billion.

Intel ​earlier this month expanded its AI CPU partnership with Google and joined ‌Elon ⁠Musk’s Terafab AI chip complex project to make processors.

“Rising demand for CPUs in AI data centers gives the company a steadier revenue lifeline that’s less dependent on the ​consumer PC cycle,” ​eMarketer analyst ⁠Jacob Bourne said.

Investors will also pay attention to the yields, or the number of ​good chips per silicon wafer, of Intel’s ​18A ⁠manufacturing process.

“For Intel to make an outsized bid here, their 18A yield improvement has to be … better than market ⁠expectations,” ​said Ryuta Makino, analyst at Intel ​investor Gabelli Funds.