Technology

Intel first-quarter revenue forecast ahead of expectations

Intel also scores major win as EU court scraps €1bn competition fine

The Luxembourg-based General Court, Europe’s second-highest, criticised the EU competition enforcer’s analysis and annulled the fine on Intel. Photograph: Gene J Puskar/AP Photo

Wed Jan 26 2022 - 14:23

Chipmaker Intel forecast first-quarter revenue above Wall Street expectations last night, placing bets on its in-house chip-making capacity to meet strong demand from PC, data center and artificial intelligence markets even through a global semiconductor supply crunch.

The company expects first-quarter revenue of about $18.3 billion (€16.1 billion), compared to analysts’ average estimates of $17.62 billion, according to IBES data from Refinitiv.

Separately, Intel on Wednesday won its fight against a €1.06 billion EU antitrust fine that the US chipmaker was handed 12 years ago for stifling a rival, in a major setback for EU competition regulators.

The judgment by Europe's second-top court in support of Intel's arguments is likely to cheer Alphabet unit Google in its fight against hefty EU antitrust fines and Apple, Amazon and Facebook, which are in the EU antitrust enforcer's crosshairs.

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The European Commission penalised Intel in 2009 for trying to block rival Advanced Micro Devices by giving rebates to computer makers Dell, Hewlett-Packard, NEC and Lenovo for buying most of their chips from Intel.

The Luxembourg-based General Court, Europe’s second-highest, criticised the EU competition enforcer’s analysis and annulled the fine.

“The (European) Commission’s analysis is incomplete and does not make it possible to establish to the requisite legal standard that the rebates at issue were capable of having, or likely to have, anticompetitive effects,” judges said.

The court annulled the entire article of the contested decision which imposed a fine of €1.06 billion on Intel for the infringement.

The commission said it would study the judgment and reflect on the possible next steps.

The same court had in 2014 upheld the Commission’s 2009 decision but was subsequently told by the EU Court of Justice, Europe’s highest, in 2017 to reexamine Intel’s appeal.

Rebates

Regulators generally do not like rebates, especially those offered by dominant companies, on concerns they may be anti-competitive. Companies, however, say regulators must prove rebates have anti-competitive effects before sanctioning them.

The ruling will complicate the regulator’s task, said Assimakis Komninos, a partner at law firm White & Case.

“This is a huge victory for Intel. It sets the bar higher for the Commission in bringing dominance cases. It will have to do an effects-based analysis for each case. This will have an impact on all companies,” he said.

The ruling can be appealed to the CJEU. – Reuters

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