Microprocessor giant Intel continues to struggle, with revenues falling 20 percent to $15.3 billion in the quarter ending September. But its profits fell even harder: Intel’s net income was just $1 billion, a dramatic dive of 85 percent from the $6.8 billion it earned in the year-ago quarter.

“Despite the worsening economic conditions, we delivered solid results and made significant progress with our product and process execution during the quarter,” Intel CEO Pat Gelsinger said. “To position ourselves for this business cycle, we are aggressively addressing costs and driving efficiencies across the business to accelerate our [integrated device manufacturing] IDM 2.0 flywheel for the digital future.”

Intel’s Client Computing Group (CCG) targets the PC market and it was again its biggest business, delivering $8.1 billion in revenues, down 17 percent year-over-year (YOY), and over half of Intel’s total revenues. The Datacenter and AI Group (DCAI) added another $4.2 billion in revenues, down 27 percent, while Intel’s Network and Edge Group (NEX) contributed $2.3 billion, up 14 percent. Intel’s other businesses—Accelerated Computing Systems and Graphics Group (AXG), Mobileye, and Intel Foundry Services (IFS)—brought up the rear with relatively small revenues in the hundreds of millions of dollars.

So what’s going wrong for Intel? Well, customers have sharply reduced PC spending in this (sort of) post-pandemic year, and Intel is investing heavily in modernizing and dramatically expanding its chip fabrication capabilities in a bid to compete with market leader TSMC. And it’s not going to get better anytime soon, though the U.S. Chips and Science Act, which will provide $52 billion in subsidies for domestic chip manufacturing, should eventually help: Intel said the downturn will continue into the current quarter.

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