Intel’s Indian arm catches parent’s global malaise

Global chipmaker Intel has been grappling with shrinking demand for personal computers, competition from new generation peers like Nvidia and other challenges that is now set to see its revenue shrink to a new decadal low in the year ended December 31, 2024 if its previous guidance is anything to go by.

The company’s India operations that has been bucking the trend of its parent, however, seems to have got caught in the hailstorm.

After a good run with a secular year on year growth for at least a decade, the chipmaker’s Indian unit saw its revenue shrinking by a sixth for the year ended March 31, 2024, information compiled by data research platform VCCEdge, shows.

Intel’s slowdown is in contrast with performance of its key rivals AMD and Nvidia that continue on their growth trajectory even as the growth rate has decelerated for them too.

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If we deep dive into how Intel has been performing in India since FY06, it is a story of 2-3 years of burst in business followed by slow growth track for a similar patch where the firm posted single digit sales growth to low double digit rise. This is arguably explained by technology lifecycle where its chips are replaced by new generation products every few years.

The trend was partly broken between FY17-20 when for four straight years it clocked 20% plus growth in the country, including an over 50% jump in FY18.

Intel’s operations are managed into three primary segments: R&D and IT related support services (RND), marketing support services (MSS), smart mobility. The RND segment that renders hardware design support services and software development and support services for the captive use of Intel group companies is the business mainstay and where Intel is facing the major slowdown.

The MSS unit that provides marketing support for Intel products, managed a strong show with revenue rising over 31% on a small base. The smart mobility segment that provides data analytics support services and supply of ADAS devices with a negligible topline also grew strongly but the group is understood to have decided to discontinue the business segment.