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By Stephen Nellis
(Reuters) – Intel Corp on Thursday reported that margins tumbled in the latest quarter as consumers bought cheaper laptops and pandemic-stricken businesses and governments clamped down on data center spending, news that sent its shares down 10%.
Intel, the dominant provider of processor chips for PCs and data centers, has struggled with manufacturing delays. In July, it said its next generation of chipmaking technology was six months behind schedule.
Chip sales are booming, but customers want lower-priced chips rather than Intel’s pricier high-performance offerings, dragging down overall gross margins.
The pandemic has given Intel a boost in the form or surging laptop sales as employees and students work and learn from home. Sales in its PC group were $9.8 billion, beating analyst estimates $9.09 billion, according to FactSet.
But Intel sold a higher volume of less-profitable chips in its PC business, driving operating margins down to 36%
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The world’s second-largest chipmaker, South Korea’s SK Hynix, on Tuesday announced a $9 billion deal to buy Intel’s flash memory chip operation as it seeks to bolster its position against rival behemoth Samsung Electronics.
SK Hynix is already the world number two maker of DRAM chips, used in computers and servers, and the second-largest chipmaker overall.
But it has lagged in the market for flash memory — or NAND — chips, which are used in everyday devices such as smartphones and USB storage drives, as well as industrial and medical equipment.
In a regulatory filing, SK Hynix said it will acquire Intel’s “entire NAND business division excluding the Optane division” for 10.3 trillion won, with Intel’s factory in Dalian, China, included in the deal.
SK Hynix ranked fourth by global NAND sales in the second quarter this year, according to market researcher Trendforce. Intel was sixth.
Their combination will see
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Intel’s first dedicated graphics card for consumers will apparently end up in an Asus laptop.
The VivoBook Flip 14 was recently unveiled on Asus’s website, and according to the features list, the laptop convertible will carry the “First Intel Discrete Graphics” unit inside.
If you dig into the Asus website code, the PC vendor also names the GPU the “Intel Iris Xe Max graphics,” which caught the attention of Twitter user @momomo_us.
Strangely, Asus hasn’t been talking up the 14-inch laptop on social media or through its public relations channels. Nor has Intel. So we’re not sure why it isn’t getting more fanfare. Asus simply told PCMag the company will release more details in “late Q4” when the product is expected to launch.
Still, the laptop does fit into Intel’s timeline for its dedicated graphics card. In August, the company’s head of graphics, Raja Koduri,