Intel says margins will recover in second half of 2023, shares rise

Chipmaker Intel Corp on Thursday said slumping gross margins will improve in the second half of the year, a welcome sign in a difficult economy that sent shares up 4% in after-hours trading.

Intel also said it was shipping a long-delayed chip in volume, and Chief Executive Pat Gelsinger told Reuters he saw signs of stability in the market for PCs, on which Intel built its reputation.

Gelsinger said he was “seeing some green shoots, increasing stability in the PC market as inventories have stabilized,” and he expected the company to hold its position in the data center business.

During a conference call with investors, the company projected that adjusted gross margins will climb above 40% in the second half, having hit historic lows in the first half of the year. That was enough to overcome concerns about current profitability.

A fall of about 30% in first-quarter global PC shipments has made some chip industry experts hopeful that an inventory build-up has cleared out, paving the way for fresh orders.

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