Intel’s IoT business
Intel (INTC) has been leveraging its six core technologies—architecture, connectivity, memory, software, security, and process nodes—to expand in the IoT (Internet of Things) and automotive spaces.
These efforts are reflected in Intel’s IoTG (Internet of Things Group), which is working on bringing data center–like capabilities to edge devices.
Intel’s IoTG revenue fell 7% YoY (year-over-year) to $816 million, while its operating profit fell 27% YoY to $189 million in the fourth quarter of 2018. It divested its WindRiver embedded software business in 2018.
If we exclude its WindRiver revenue, IoTG’s revenue fell 4% YoY in the fourth quarter of 2018. On a sequential basis, IoTG’s revenue fell 11%, better than its expected decline of 15%, as Intel had prioritized the production of PC and data center chips over IoT chips, straining supply. IoT revenue will pick up in the first quarter of 2019 as Intel tackles supply issues.
The revenue of Intel’s automotive business, Mobileye, rose 43% YoY to $183 million in the fourth quarter as it continued to secure design wins. During the same quarter, Cypress Semiconductor’s (CY) automotive revenue rose 19% YoY due to increasing semiconductor content in connected cars. Xilinx’s (XLNX) automotive revenue also rose in the double digits YoY.
Intel’s programmable solutions business
Like Intel’s memory business, its PSG (Programmable Solutions Group) caters largely to its data center group. In the fourth quarter, PSG’s revenue rose 7.7% YoY to $612 million driven by 50% growth in the data center segment. Xilinx also reported 14% YoY growth in the data center segment.
PSG’s operating profit rose 4% YoY to $162 million as the mix of advanced products and 20 nm (nanometer) and 14 nm products increased to 70%. Overall, all Intel’s businesses reported YoY revenue growth except IoT. Its IoT revenue fell because of supply constraints.
Moving into 2019, Intel has a new CEO, Bob Swan, who will continue to lead the company to tap its expanded addressable market. We’ll look into these opportunities next.