But despite the display of self-confidence from new chief executive officer Brian Krzanich, the company's annual investor day left analysts voicing an increasingly impatient question: where's the growth?
In his first extensive presentation to investors, Mr Krzanich set a low bar, projecting no increase in revenue for Intel next year despite what he predicted would be a stabilisation of the personal computer market after two years of decline. But he said better things lie ahead thanks to a durable lead in manufacturing and a new, more flexible approach to product development.
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IN TECHNOLOGY
Mr Krzanich, a former head of Intel's manufacturing operations, left no doubt where he sees the company's competitive advantage: "Moore's law, more than anything, drives this company."
By packing more transistors into an ever smaller space, he said, Intel could continue to bring down the cost of processing power at its historic rate.
"Historically, that has helped them get into new markets and crush the competition," said Doug Freedman, chip industry analyst at RBC Capital Markets. Yet 2014 will be the fourth year in a row that Intel's over-reliance on PCs has left its revenues stuck at a little over $50bn.
Even maintaining manufacturing momentum is becoming difficult as transistors shrink to minute scale. Intel admitted last month that manufacturing yields for production of 14 nanometre chips were below target.
That has forced it to delay full production by three months – the "first time in quite a number of [chip] generations" it has suffered this problem, William Holt, head of technology and manufacturing, admitted on Thursday. He added, ruefully: "It's getting quite hard."
The company also faces higher capital costs, with the cost of the larger wafers out of which the chips are cut rising significantly. To offset that, Intel said it had been able to greatly increase the density of transistors on each chip – a category in which it claimed to be about to move ahead of rivals, after lagging behind for several years. That would translate directly into a cost advantage, Mr Krzanich said.
Yet the leap into the next generation of chip technology looks set to present Intel with a conundrum: a massive increase in the number of transistors it produces, far exceeding the number it is likely to need for its own products as it struggles to win a bigger slice of the fast-growing mobile market.
It is the projected surplus of transistors, according to some analysts, that has prompted it to break with its insular tradition by offering to make chips for other companies – even direct rivals.
"We're opening up our foundry and listening to all proposals," said Mr Holt, as Intel executives for the first time spelt out a sweeping plan to compete with contract chip manufacturers such as TSMC and GlobalFoundries.
Moore's law, more than anything, drives thiscompany
- Brian Krzanich, chief executive
Mr Krzanich added that the US company was prepared to open up its most advanced manufacturing capabilities only to companies "prepared to pay for it" – a comment that whetted the appetite of analysts who have speculated Intel could strike an alliance with Apple as it reduces its reliance on buying components from Samsung Electronics.
Wall Street's main hopes for a return to growth, however, have rested on an end to the decline in PCs and inroads in tablets and smartphones, where Intel has largely been shut out.
"Intel fundamentally needs to demonstrate it can succeed in small core, energy efficient designs," said Patrick Moorhead, an independent chip analyst.
After a year spent establishing a foothold in tablets, Mr Krzanich laid out a target for Intel to get its chips into 40m machines in 2014, representing about 15 per cent of the tablet market, up from 10m in 2013.
But even that may do little to stoke growth. At an estimated $15 each, the chips in 40m machines would only bring an extra $600m, adding little more than 1 per cent to Intel's revenue, according to Mr Freedman.
Meanwhile, executives admitted that it will not be until 2015 that they have chips ideally suited to tablets – prompting questions about whether Intel was any closer to catching up with device makers' requirements, after being late to market with other chips that it promised would give it a stronger foothold in mobile computing.
In one sign of how the company is trying to run faster, Mr Krzanich unveiled plans for a new chip, known as SoFIA, aimed at low-end tablets. Rather than designing it from the ground up, he said Intel would take an existing feature phone product but replace the Arm-based computing "core" with an Intel application processor – enabling it to get a product to market much quicker.
Whatever the prospects of such products, however, Wall Street is still betting that they will do little in the short term – a belief highlighted by recent stock price malaise. As Stacy Smith, chief financial officer, warned on Thursday, the company's fortunes will continue to depend far more on the uncertain health of the PC market.
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