Quarterly report pursuant to Section 13 or 15(d)

Operating Segments

v3.23.1
Operating Segments
3 Months Ended
Apr. 01, 2023
Segment Reporting [Abstract]  
Operating Segments
Note 2 : 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 now manage our business through the following operating segments:
Client Computing (CCG)
Data Center and AI (DCAI)
Network and Edge (NEX)
Mobileye
Intel Foundry Services (IFS)
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 is 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. There have been no changes to our segment accounting policies disclosed in our 2022 Form 10-K except for the organizational change described above.
Net revenue and operating income (loss) for each period were as follows:
Three Months Ended
(In Millions)
Apr 1, 2023 Apr 2, 2022
Net revenue:
Client Computing
Desktop $ 1,879  $ 2,641 
Notebook 3,407  5,959 
Other 481  722 
5,767  9,322 
Data Center and AI 3,718  6,074 
Network and Edge 1,489  2,139 
Mobileye 458  394 
Intel Foundry Services 118  156 
All other 165  268 
Total net revenue $ 11,715  $ 18,353 
Operating income (loss):
Client Computing $ 520  $ 2,722 
Data Center and AI (518) 1,393 
Network and Edge (300) 416 
Mobileye 123  148 
Intel Foundry Services (140) (23)
All other (1,153) (315)
Total operating income (loss) $ (1,468) $ 4,341