Intel Corporation · NASDAQ:INTC
Intel — Investor Day (November 2013)
56 slides from Intel's investor day presentation, Nov 22, 2013
Slide 1: If it Computes, it does it BEST with Intel
INVESTOR MEETING 2013 November 21, Santa Clara, CA If it Computes, it does it BEST with Intel Stacy Smith Executive Vice President Chief Financial Officer Exhibit 99.1
Slide 2: Stacy's 2014 Guidance Haiku
A Japanese lyric verse form having three unrhymed lines of five, seven, and five syllables, traditionally invoking an aspect of nature or the seasons Stacy’s 2014 Guidance Haiku Units Autumn Renew Warmth of Data Fireplace Spring Mobile Motion! Haiku
Slide 3: Key Messages
Key Messages Repositioning the company to sell into broad range of devices If it computes, it does it BEST with Intel The explosion of devices, services and data are driving the growth of our data center business Process technology leadership = Economic benefits (i.e. lower cost, foundry opportunity
Slide 4: If it Computes, it does it BEST with Intel
If it Computes, it does it BEST with Intel INTEL ~80% ~350Mu Traditional PC Circa 2010 INTEL ~20% Traditional PC + 2:1+Tablet + Phone + Intelligent Systems 2014+ 3 Billion Units+ Forecast is based on current expectations and is subject to change without notice Source: Intel, IDC
Slide 5: Shifting Investments
Shifting Investments 2014 Spending Forecast vs. 2012 Tablets > 75% Increase SOC, Android Internet of Things > 20% Increase Intel® Quark, new devices Multi-comms > 15% Increase LTE Technology Development > 10% Increase Extending process technology lead Data Center > 10% Increase Networking, storage,
Slide 6: Segments of our Business
Segments of our Business Our Core Financial Advantage Cash and Shareholder Return
Slide 7: 2013 Segment Revenue and Operating Margin
Software and Services Group PC Client Group 2013 Rev/OM $32.7B / $11.6B Other Intel Arch. 2013 Rev/OM $4.0B / ($2.5B) Data Center Group 2013 Rev/OM $11.5B / $5.3B 2013 Rev/OM $2.5B / Breakeven *Forecast is based on current expectations and is subject to change without notice Source: Intel All Other
Slide 8: PC Client Group 2012 vs. 2013 Forecast
PC Client Group 2012 vs. 2013 Forecast 2013 PERFORMANCE ~$32.7B of revenue: Down ~5% YoY PC TAM down ~10% YoY, excluding netbooks down ~7%. ~$11.6B of operating margin: ~35% of revenue Unit cost down in the performance and mainstream segments Increased investment in 2:1s / perceptual computing, over
Slide 9: PC Unit Trend
PC Unit Trend PC market is stabilizing. We expect units slightly down next year. Forecast is based on current expectations and is subject to change without notice Source: Intel Mu Forecast
Slide 10: Platform ASP
*Platform includes both CPU and chipset and excludes Atom Forecast is based on current expectations and is subject to change without notice Source: Intel Platform* ASP 0 2006 2007 2008 2009 2010 2011 2012 2013
Slide 11: Platform Cost
$ 0 Source: Intel *Platform includes both CPU and chipset and excludes Atom Platform* Cost 2006 2007 2008 2009 2010 2011 2012 2013 *Platform includes both CPU and chipset and excludes Atom Forecast is based on current expectations and is subject to change without notice Source: Intel
Slide 12: Platform ASP and Cost
$ 0 Platform* ASP and Cost 2006 2007 2008 2009 2010 2011 2012 2013 *Platform includes both CPU and chipset and excludes Atom Forecast is based on current expectations and is subject to change without notice Source: Intel
Slide 13: Segmented Costs to Compete Across Segments
Segmented Costs to Compete Across Segments Platform Costs* Performance Mainstream Value * Platform includes both CPU and Chipset components Forecast is based on current expectations and is subject to change without notice Source: Intel Forecast Forecast Forecast
Slide 14: Extending the Cost Curve in Client
Extending the Cost Curve in Client Lowest PC Client Platform Cost Sources: Intel Forecast is based on current expectations and is subject to change without notice 30% 37% Core Based Celeron Bay Trail Celeron Broxton Celeron Forecast Forecast Forecast
Slide 15: PC Client Group Looking Forward to 2014
PC Client Group Looking Forward to 2014 Revenue down mid-single digits Operating profit ~flat Sources: Intel Forecast is based on current expectations and is subject to change without notice PC Client Group
Slide 16: 2013 Segment Revenue and Operating Margin
Software and Services Group PC Client Group 2013 Rev/OM $32.7B / $11.6B Other Intel Arch. 2013 Rev/OM $4.0B / ($2.5B) Data Center Group 2013 Rev/OM $11.5B / $5.3B 2013 Rev/OM $2.5B / Breakeven *Forecast is based on current expectations and is subject to change without notice Source: Intel All Other
Slide 17: Other Intel Architecture 2012 vs. 2013 Forecast
Other Intel Architecture 2012 vs. 2013 Forecast 2013 Performance ~$4.0B of Revenue: down ~8% YoY Decline in Netbooks and Multi-comms partially offset by growth in Intelligent Systems. ~$2.5B Operating loss: Increased investments $Billion *Forecast is based on current expectations and is subject to c
Slide 18: Other Intel Architecture Tablets
Other Intel Architecture Tablets Started shipping significant volume in 2H’13 Expect to rapidly grow share in 2014 Increased operating loss on higher NRE and contra revenue Corporate gross margin impact of (1.5pts) in 2014 Forecast Forecast Tablet Volume *Forecast is based on current expectations an
Slide 19: Tablet Segmentation
Tablet Segmentation 2014 1 Product Serving all Segments Die Size High-end Tablet Integration 2015 Low-end Tablet 3 Products Serving Multiple Segments High-end Tablet *Forecast is based on current expectations and is subject to change without notice Source: Intel Internal Roadmap Bay Trail Broxton So
Slide 20: Other Intel Architecture Multi-comms
Other Intel Architecture Multi-comms Revenue down in ’13 as the market shifted rapidly to 4G Shipping LTE voice and data now. Advanced LTE in 1H’14. Revenue down slightly in ’14. Steep ramp of LTE in 2H. *Forecast is based on current expectations and is subject to change without notice Source: Intel
Slide 21: Other Intel Architecture Intelligent Systems Group
Other Intel Architecture Intelligent Systems Group Business accelerated in 2H’13 as a result of improving macro. Design win momentum continues across all segments. 2013 revenue > $2B. For ’14, expect revenue growth in the mid-teens. Forecast *Forecast is based on current expectations and is subject
Slide 22: Intelligent Systems + Wind River
Intelligent Systems + Wind River = 100% Share of Mars Autonomously Driven Car Market * Image Source: Nasa JPL
Slide 23: Other Intel Architecture Looking Forward to 2014
Other Intel Arch. Other Intel Architecture Looking forward to 2014 Revenue approximately flat Wider operating loss *Forecast is based on current expectations and is subject to change without notice Source: Intel
Slide 24: 2013 Segment Revenue and Operating Margin
Software and Services Group PC Client Group 2013 Rev/OM $32.7B / $11.6B Other Intel Arch. 2013 Rev/OM $4.0B / ($2.5B) Data Center Group 2013 Rev/OM $11.5B / $5.3B 2013 Rev/OM $2.5B / Breakeven *Forecast is based on current expectations and is subject to change without notice Source: Intel All Other
Slide 25: Data Center Group 2012 vs. 2013 Forecast
Data Center Group 2012 vs. 2013 Forecast 2013 Performance ~$11.5B of Revenue: up ~9% YoY Benefitted from both unit growth and a richer mix ~$5.3B of Operating income: 47% of revenue $Billion Forecast *Forecast is based on current expectations and is subject to change without notice Source: Intel
Slide 26: Intel Atom Microservers vs Xeon Socket Nodes
20 Intel® Atom™ Microservers 4 Intel® Xeon® 2 Socket Nodes *Forecast is based on current expectations and is subject to change without notice Other names and brands may be claimed as the property of others. Source: Intel Comparable Revenue and Profit Comparing Intel® Xeon® and Atom™ based Servers At
Slide 27: Data Center Group Looking Forward
Data Center Group Data Center Group Looking Forward 2014 Low to mid-teen revenue growth Operating profit grows faster than revenue Longer term growth CAGR of 15% Services and devices driving cloud growth Rapid growth in high performance computing Expanding our footprint in networking, storage, fabri
Slide 28: 2013 Segment Revenue and Operating Margin
Software and Services Group PC Client Group 2013 Rev/OM $32.7B / $11.6B Other Intel Arch. 2013 Rev/OM $4.0B / ($2.5B) Data Center Group 2013 Rev/OM $11.5B / $5.3B 2013 Rev/OM $2.5B / Breakeven *Forecast is based on current expectations and is subject to change without notice Source: Intel All Other
Slide 29: Software and Services Group
Software and Services Group 2013: ~$2.5B in revenue /~breakeven McAfee: Winning share and performing well in a down PC market. Wind River: Key differentiator to win in IoT. 2014: Expect low double digit revenue growth/move from breakeven to profit *Forecast is based on current expectations and is su
Slide 30: Non-Volatile Memory Solutions Group
Non-Volatile Memory Solutions Group $0 Forecast Forecast *Forecast is based on current expectations and is subject to change without notice Source: Intel
Slide 31: Our Core Financial Advantage
Segments of our Business Our Core Financial Advantage Cash and Shareholder Return
Slide 32: From Last Year: An Additional Observation
From Last Year An Additional Observation The increase in capital intensity will not result in an increase in our unit costs or lower our gross margin Still True *Forecast is based on current expectations and is subject to change without notice
Slide 33: From Last Year
From Last Year 1. Cost per square inch goes up over time 2. Doubling of transistors = “Scaling” - Improves performance - Cost per transistor declines
Slide 34: Density Improvements Offset Wafer Cost Trends
Density Improvements Offset Wafer Cost Trends X = $/mm2 $/transistor mm2/transistor Normalized Capital Growth ($/WS) Normalized Area/Transistor Growth (mm2)/Tx Count Normalized Cost per Transistor ($/Tx) *Forecast is based on current expectations and is subject to change without notice Source: Intel
Slide 35: Capital Intensity Is Increasing
Capital Intensity Is Increasing $ 0 Capital Spending per Wafer Start Will be Higher *Forecast is based on current expectations and is subject to change without notice Source: Intel Forecast
Slide 36: So hold on there Tex
So hold on there Tex … While we believe Bill, how can this not result in an increasing cost per unit?
Slide 37: Weighted Average Die Size
Weighted Average Die Size Platform* mm2 Forecast Forecast is based on current expectations and is subject to change without notice Sources: Intel *Platform includes CPU and chipset
Slide 38: WADS Decline Not Just Mix
WADS Decline Not Just Mix 29% Drop from ’13 to ‘15 Forecast Forecast *Forecast is based on current expectations and is subject to change without notice Source: Intel
Slide 39: Scaling (Density) Improving
Scaling (Density) Improving 32/28 nm 22/20* nm 14 nm* / 16 FF* 10 nm* Intel TSMC Log Scale Area Scaling ~45% ahead * 35% ahead Sources: TSMC keynote, ARM Tech Con 2012, Oct. 30, 2012. Intel data *Alignment based on internal assessment Forecast is based on current expectations and is subject to chang
Slide 40: But hold on there Tex
But hold on there Tex … At ~$11B of capex you must be putting in a lot of unit capacity?
Slide 41: 2013 Capex Breakout
2013 Capex Breakout Capacity Development Non-Manufacturing 450mm *Forecast is based on current expectations and is subject to change without notice Source: Intel ~$7B
Slide 42: Depreciation Trends
Depreciation Trends COS Depreciation as a % of Revenues % Forecast COS Depreciation as a % of Total Cost of Sales Forecast % Sources: Intel Forecast is based on current expectations and is subject to change without notice
Slide 43: Not Growing Wafer Capacity
Not Growing Wafer Capacity Peak Wafer Starts per Week Capex / Peak Wafer Starts per Week ku 0 Forecast $ 0 *Forecast is based on current expectations and is subject to change without notice Source: Intel
Slide 44: Factory Utilization Over Time
Factory Utilization Over Time Forecast *Forecast is based on current expectations and is subject to change without notice Source: Intel
Slide 45: OK Tex, enough beating around the bush
OK Tex, enough beating around the bush … Why won’t you just tell me gross margin?
Slide 46: Gross Margins
Gross Margins Forecast *The 2013 forecast is based on Q1-Q3’13 actuals plus the midpoint of the Q4’13 forecast. Forecast range is based on current expectations and is subject to change without notice Source: Intel
Slide 47: Cash and Shareholder Return
Segments of our Business Our Core Financial Advantage Cash and Shareholder Return
Slide 48: Capital Allocation Philosophy
Capital Allocation Philosophy Invest in our business Generate returns for shareholders via an increasing dividend Target allocation for the dividend is ~40% of free cash flow Use share purchases as an additional way to return cash to shareholders
Slide 49: Strong Cash Generation
Strong Cash Generation $Billion Forecast *Forecast is based on current expectations and is subject to change without notice Source: Intel
Slide 50: Committed to the Dividend
Committed to the Dividend Dividend/Share ~4% Dividend Yield Forecast *Forecast is based on current expectations and is subject to change without notice Source: Intel
Slide 51: Returning Cash to Shareholders
Returning Cash to Shareholders Cumulative Cash Returned $Billion Dividend Share Repurchase Source: Intel *Forecast based on Q1-Q3 actuals and Q4 dividend consistent with Q3. ~$85B Returned Over the Past Decade* ~4% Dividend Yield Forecast
Slide 52: Putting It All Together: Expectations for 2014
Putting It All Together Expectations for 2014 Revenue approximately flat GM approximately flat at the middle of our long term range Spending as a % of revenue ~flat* Operating income ~flat Forecast is based on current expectations and is subject to change without notice *Excludes restructuring charg
Slide 53: Key Messages
Key Messages Repositioning the company to sell into broad range of devices If it computes, it does it BEST with Intel The explosion of devices, services and data are driving the growth of our data center business Process technology leadership = Economic benefits (i.e. lower cost, foundry opportunity
Slide 54: Q&A
Q&A
Slide 55: Risk Factors
Risk Factors The above statements and any others in this document that refer to plans and expectations for the fourth quarter, the year and the future are forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” “expects,” “intends,” “plans,” “believe
Slide 56: Intel Look Inside
( intel) Look Inside”