Annual report pursuant to Section 13 and 15(d)

Operating Segments

v3.20.4
Operating Segments
 12 Months Ended
Dec. 26, 2020
Segment Reporting [Abstract]  
Operating Segments
Note 3 : Operating Segments
We manage our business through the following operating segments:
▪DCG
▪IOTG
▪Mobileye
▪NSG
▪PSG
▪CCG
We derive a substantial majority of our revenue from platform products, which are our principal products and considered as one class of product. We offer platform products that incorporate various components and technologies, including a microprocessor and chipset, a stand-alone SoC, or a multichip package, based on Intel architecture. Platform products are used in various form factors across our DCG, IOTG, and CCG operating segments. Our non-platform, or adjacent, products can be combined with platform products to form comprehensive platform solutions to meet customer needs.
DCG and CCG are our reportable operating segments. IOTG, Mobileye, NSG, and PSG do not meet the quantitative thresholds to qualify as reportable operating segments; however, we have elected to disclose the results of these non-reportable operating segments. Our Internet of Things portfolio, presented as Internet of Things, is comprised of the IOTG and Mobileye operating segments. Beginning with the first quarter of 2021, we expect our DCG operating segment to include the results of our Intel Optane memory business, and our NSG segment will be composed of our NAND memory business.
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;
▪historical results of operations from divested businesses;
▪results of operations of start-up businesses that support our initiatives, including our foundry business;
▪amounts included within restructuring and other charges;
▪a portion of employee benefits, compensation, 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. Operating segments do not record inter-segment revenue. We do not allocate gains and losses from equity investments, interest and other income, or taxes to operating segments. Although the CODM uses operating income 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 26, 2020 Dec 28, 2019 Dec 29, 2018
Net revenue:
Data Center Group
Platform $ 23,056  $ 21,441  $ 21,155 
Adjacent 3,047  2,040  1,836 
26,103  23,481  22,991 
Internet of Things
IOTG 3,007  3,821  3,455 
Mobileye 967  879  698 
3,974  4,700  4,153 
Non-Volatile Memory Solutions Group 5,358  4,362  4,307 
Programmable Solutions Group 1,853  1,987  2,123 
Client Computing Group
Platform 35,642  32,681  33,234 
Adjacent 4,415  4,465  3,770 
40,057  37,146  37,004 
All other 522  289  270 
Total net revenue $ 77,867  $ 71,965  $ 70,848 
Operating income (loss):
Data Center Group $ 10,571  $ 10,227  $ 11,476 
Internet of Things
IOTG 497  1,097  980 
Mobileye 241  245  143 
738  1,342  1,123 
Non-Volatile Memory Solutions Group 361  (1,176) (5)
Programmable Solutions Group 260  318  466 
Client Computing Group 15,129  15,202  14,222 
All other (3,381) (3,878) (3,966)
Total operating income $ 23,678  $ 22,035  $ 23,316 
Disaggregated net revenue for each period was as follows:
Years Ended (In Millions) Dec 26, 2020 Dec 28, 2019 Dec 29, 2018
Platform revenue
DCG platform $ 23,056  $ 21,441  $ 21,155 
IOTG platform 2,705  3,440  3,065 
CCG desktop platform 10,692  11,822  12,220 
CCG notebook platform 24,903  20,779  20,930 
CCG other platform1
47  80  84 
61,403  57,562  57,454 
Adjacent revenue2
16,464  14,403  13,394 
Total revenue $ 77,867  $ 71,965  $ 70,848 
1    Includes our tablet and service provider revenue.
2    Includes all of our non-platform products for DCG, IOTG, and CCG, such as modem, Ethernet, and silicon photonics, as well as Mobileye, NSG, and PSG productsIn 2020, our three largest customers accounted for 39% of our net revenue (41% in 2019 and 39% in 2018), with Dell Inc. accounting for 17% (17% in 2019 and 16% in 2018), Lenovo Group Limited accounting for 12% (13% in 2019 and 12% in 2018), and HP Inc. accounting for 10% (11% in 2019 and 11% in 2018). These three customers accounted for 43% of our accounts receivable as of December 26, 2020 (39% as of December 28, 2019). Substantially all of the revenue from these customers was from the sale of platforms and other components by the CCG and DCG operating segments.
Net revenue by country, based on the billing location of the customer, was as follows:
Years Ended (In Millions) Dec 26, 2020 Dec 28, 2019 Dec 29, 2018
China (including Hong Kong) $ 20,257  $ 20,026  $ 18,824 
Singapore 17,845  15,650  15,409 
United States 16,573  15,617  14,303 
Taiwan 11,605  10,058  10,646 
Other countries 11,587  10,614  11,666 
Total net revenue $ 77,867  $ 71,965  $ 70,848