On July 28, Intel disclosed that it had its first quarterly loss in years, losing close to $500 million in Q2 2022. According to the Gizmodo news story, the company blamed the declines on weaker demand for PC components and general economic downturns.

According to Intel Q2 financial results, the company's revenues decreased by 22% from the previous year. Due to these outcomes, Intel had to reduce its projected annual revenues from $68 billion to $65 billion.

What Is the Cause of Intel's Decline in Revenue

Chief Financial Officer David Zinsner emphasized that the COVID-19 related downturn was partially to blame for falling consumer demand, which in turn caused the decline of the semiconductor company's revenue.

In terms of the economy, Zinsner claimed that the company was particularly badly impacted by a confluence of growing prices, increased interest rates, and the conflict in Ukraine.

"Due to the difficult macroeconomic environment together with our own execution challenges, our results for the quarter were well below expectations," Zinsner said.

Intel Might Raise Their Prices To Adapt to Inflation

Gizmodo, citing PC World, reported that Intel intends to transfer part of the inflationary pricing to customers. Therefore, you might want to purchase any new Intel chips before the Q4 as Zinsner reportedly confirmed the semiconductor manufacturer is preparing to increase component pricing.

Read More: Apple's iPhone Hits Best Q2 Global Market Share in 10 Years

Intel CEO Remains Optimistic

The CEO of Intel, Pat Gelsinger, was optimistic about the coming rise in chip demand despite losing half a billion dollars in a few months.

This is particularly true in light of the unprecedented $280 billion spending bill that was approved by the House of Representatives and will invest $52 billion into the semiconductor industry in the U.S.

Intel Previously Announced Hiring Freeze

Previously reported, the semicon giant recently joined the list of tech companies which put a pause on their hiring.

The chip scarcity has grown more common during the previous few years. As a result, it is currently temporarily stopping the onboarding of talents worldwide.

All hiring and job applications have been suspended at Intel's client computing division until further notice. This unit is in charge of developing the PC chips used in desktop and laptop computers.

April saw a 12.1% decline in chip manufacturing in China compared to the same month last year. As of December 2020, the production rate reportedly has the lowest capacity.

In addition, because the pandemic has begun to subside in several areas of the world, consumer demand has also declined. Inflation is also one factor that should be considered.

However, Intel continues to believe that if they spend more time focusing on and prioritizing their spending, they will be better able to withstand the uncertainties of macroeconomic conditions, execute their business strategy, and fulfill their obligations to their customers, shareholders, and employees.

Related Article: Intel Freezes Hiring-Bracing for Chip Reset Ahead