Few things went right for chip giant Intel (NASDAQ: INTC) in the fourth quarter.

In the PC market, a dramatic tumble in demand that played out in the second half of 2022 transformed component shortages into gluts. Intel shipped PC central processing units (CPUs) at a rate that was about 10% below consumption throughout 2022, with that gap expanding in Q4 and expected to further widen in Q1 2023. The first quarter will mark "the most significant inventory digestion in our data set," according to CEO Pat Gelsinger.

The market for server CPUs isn't in as bad a shape, but it's deteriorating. Inventory corrections are playing out there as well, with Intel seeing server CPU shipments dropping by a mid-single-digit rate in 2022. On top of weakening demand in a tough economy, Intel is losing share in the data center to rival Advanced Micro Devices (NASDAQ: AMD) and its powerful Genoa chips.

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Source Fool.com