Annual report pursuant to Section 13 and 15(d)

Operating Segments

v3.23.4
Operating Segments
 12 Months Ended
Dec. 30, 2023
Segment Reporting [Abstract]  
Operating Segments
Note 3 : Operating Segments
We previously announced the organizational change to integrate AXG into CCG and DCAI. This change is intended to drive a more effective go-to-market capability and to accelerate the scale of these businesses, while also reducing costs. As a result, we modified our segment reporting in the first quarter of 2023 to align to this and certain other business reorganizations. All prior-period segment data has been retrospectively adjusted to reflect the way our CODM internally receives information and manages and monitors our operating segment performance starting in fiscal year 2023.
We manage our business through the following operating segments:
▪Client Computing Group
▪Data Center and AI
▪Network and Edge
▪Mobileye
▪Intel Foundry Services
We derive a substantial majority of our revenue from our principal products that incorporate various components and technologies, including a microprocessor and chipset, a stand-alone SoC, or a multichip package, which are based on Intel architecture.
CCG, DCAI, and NEX are our reportable operating segments. Mobileye and IFS do not qualify as reportable operating segments; however, we have elected to disclose the results of these non-reportable operating segments. When we enter into federal contracts, they are aligned to the sponsoring operating segment.
We have sales and marketing, manufacturing, engineering, finance, and administration groups. Expenses for these groups are generally allocated to the operating segments.
We have an "all other" category that includes revenue, expenses, and charges such as:
▪results of operations from non-reportable segments not otherwise presented, and from start-up businesses that support our initiatives;
▪historical results of operations from divested businesses;
▪amounts included within restructuring and other charges;
▪employee benefits, compensation, impairment charges, and other expenses not allocated to the operating segments; and
▪acquisition-related costs, including amortization and any impairment of acquisition-related intangibles and goodwill.
The CODM, who is our CEO, allocates resources to and assesses the performance of each operating segment using information about the operating segment's revenue and operating income (loss). The CODM does not evaluate operating segments using discrete asset information, and we do not identify or allocate assets by operating segments. Based on the interchangeable nature of our manufacturing and assembly and test assets, most of the related depreciation expense is not directly identifiable within our operating segments, as it is included in overhead cost pools and subsequently absorbed into inventory as each product passes through our manufacturing process. Because our products are then sold across multiple operating segments, it is impracticable to determine the total depreciation expense included as a component of each operating segment's operating income (loss) results. We do not allocate gains and losses from equity investments, interest and other income, share-based compensation, or taxes to our operating segments. Although the CODM uses operating income (loss) to evaluate the segments, operating costs included in one segment may benefit other segments. The accounting policies for segment reporting are the same as for Intel as a whole.
Net revenue and operating income (loss) for each period were as follows:
Years Ended (In Millions) Dec 30, 2023 Dec 31, 2022 Dec 25, 2021
Net revenue:
Client Computing
Desktop $ 10,166  $ 10,661  $ 12,437 
Notebook 16,990  18,781  25,443 
Other 2,102  2,331  3,201 
29,258  31,773  41,081 
Data Center and AI $ 15,521  $ 19,445  $ 22,774 
Network and Edge 5,774  8,409  7,665 
Mobileye 2,079  1,869  1,386 
Intel Foundry Services 952  469  347 
All other 644  1,089  5,771 
Total net revenue $ 54,228  $ 63,054  $ 79,024 
Operating income (loss):
Client Computing $ 6,520  $ 5,569  $ 15,523 
Data Center and AI (530) 1,300  7,376 
Network and Edge (482) 1,033  1,935 
Mobileye 664  690  554 
Intel Foundry Services (482) (281) 76 
All other (5,597) (5,977) (6,008)
Total operating income (loss) $ 93  $ 2,334  $ 19,456 


In 2022, we initiated the wind-down of our Intel Optane memory business, which is part of our DCAI operating segment. While Intel Optane is a leading technology, it was not aligned to our strategic priorities. Separately, we continue to embrace the CXL standard. As a result, we recognized an inventory impairment of $723 million in cost of sales on the Consolidated Statements of Income in 2022. The impairment charge is recognized as a corporate charge in the "all other" category presented above.
In 2023, substantially all of the revenue from our three largest customers was from the sale of platforms and other components by our CCG and DCAI operating segments. Our three largest customers accounted for the following percentage of our net revenue:
Years Ended
 Dec 30, 2023 Dec 31, 2022 Dec 25, 2021
Dell Inc.
 19  % 19  % 21  %
Lenovo Group Limited
 11  % 12  % 12  %
HP Inc.
 10  % 11  % 10  %
Total percentage of net revenue
 40  % 42  % 43  %
Net revenue by region, based on the billing location of the customer, was as follows:
Years Ended (In Millions) Dec 30, 2023 Dec 31, 2022 Dec 25, 2021
China $ 14,854  $ 17,125  $ 22,961 
Singapore 8,602  9,664  18,096 
United States 13,958  16,529  14,322 
Taiwan 6,867  8,287  11,418 
Other regions 9,947  11,449  12,227 
Total net revenue $ 54,228  $ 63,054  $ 79,024