Latest news with #IntelFoundry
The Hill
30-07-2025
- Business
- The Hill
Intel's Ohio plans hinge on finding new customers
NEW ALBANY, Ohio (WCMH) — Intel announced it will need to get external customers for its manufacturing division, or it may need to stop all work in Ohio. Last week, Intel announced it is further slowing construction at its $28 billion manufacturing site in Licking County. Intel also said if it is unable to find external customers for a new manufacturing technology, it will likely have to stop all work in Ohio. The technology is called 14A and won't debut until 2027, so Intel will have some time to try and acquire the customers it needs. See previous coverage of Intel's slowed construction in the video player above. Why is 14A such a big deal to Ohio? To understand 14A's importance, it's crucial to first understand how Intel works. Intel is largely split into two divisions: Intel Products and Intel Foundry. Products is in charge of inventing and marketing physical goods, and Foundry is in charge of manufacturing those goods. Intel largely looks at them as two separate companies that both play a role in making semiconductors. Semiconductors are small, about the size of your fingernail, and incredibly difficult to manufacture. Intel Foundry is tasked with figuring out the best methods, called process nodes, of making them. Nodes are like recipes that detail thousands of steps and precise ingredients that Intel will use to manufacture a semiconductor chip. Nodes are evaluated based on power, performance and how much area is needed for silicon. The best node will use less power and area while maximizing performance at a low cost. 14A is Intel's newest node and is still in development, but the company has high hopes for it. Intel Foundry makes its money by marketing these 'recipes' to customers. Foundry's largest customer is Intel Products, but the company said it will need other customers if it is going to keep the Foundry business afloat. In its Q2 fiscal results, Intel was honest that it would likely have to stop all operations in Ohio if it could not secure external customers for 14A. Will Intel be able to get those customers? Intel CEO Lip-Bu Tan is hopeful the company will secure external 14A customers, but it will require a lot of trust. So far, the company has been largely unsuccessful in attracting outside clients, and even Intel Products sometimes uses external manufacturers rather than Intel Foundry. Although Intel sees Products and Foundry as different entities, it's hard to convince other companies to feel the same. Intel Products is a direct competitor to all of the companies that Intel Foundry hopes to contract with. From the outside, it's easy for other companies to just see Intel, the name of their competition, and turn elsewhere for manufacturing. Other customers could worry Intel won't prioritize their business over internal manufacturing, or have difficulty trusting an apparent competitor with their product secrets. Lancaster dog boarder severely damaged by flood Tan plans to fix this by emphasizing trust and learning from what did not work with the process nodes Intel already has. He said the company's history as a leader in the tech industry allows them to still be competitive as a manufacturing business. Since taking on the role of CEO in March, Tan has met with dozens of Intel customers to hear what the company can do better. Intel representatives told NBC4 they are still committed to the Ohio One plant. Intel is already scaling down Foundry operations, including slowing construction in Ohio, as Tan realigns the Foundry to be reactive to market needs instead of proactive. Tan said Intel will only invest in Foundry expenses if there is a clear market for them going forward, including Ohio's plant. What if Intel can't get the customers? Without external 14A customers, Intel said it will 'likely' stop all Ohio operations as part of a larger deconstruction of the Foundry. This decision would be expensive; Intel said there are only two other semiconductor manufacturing companies that could develop the products they need, and relying on third parties would be pricy. Getting out of the promises made in Ohio and other states would be even more expensive. Intel estimated it has invested over $100 billion in property and equipment at its Foundry sites that it could lose out on. It would also likely have to pay Ohio and the federal government back for monetary incentives it received to build semiconductor chips in New Albany, which could cost billions. In November 2024, Intel signed an agreement with the U.S. Department of Commerce for an award of $7.9 billion, $1.5 billion of which was supposed to go to Ohio. The money came from the bipartisan CHIPS Act, which allocates funding to promote domestic semiconductor manufacturing. Despite the agreement, Intel said it has not received CHIPS Act payments it has submitted for reimbursement. To date, Intel has received $2.2 billion, all of which appeared to be paid before President Donald Trump, a CHIPS Act critic, took office. Intel said between April and July, it submitted claims for $850 million of CHIPS Act funding, but has received none of it and is uncertain if it will come at all. Intel stopped or combined nearly all of its other Foundry expansion projects in other countries, but has repeatedly affirmed its commitment to Ohio. With 14A unavailable for the next two years, it seems most likely Ohio's construction will slowly continue until 14A's future is made clear. Intel has not announced an updated timeline with slowed construction.
Yahoo
25-07-2025
- Business
- Yahoo
Intel Corp (INTC) Q2 2025 Earnings Call Highlights: Revenue Surpasses Expectations Amid ...
Revenue: $12.9 billion, above the high end of guidance. Non-GAAP Gross Margin: 29.7%, impacted by $800 million in non-cash impairment and $200 million in one-time period costs. Non-GAAP EPS: Minus $0.10, excluding charges would have been $0.10. Operating Cash Flow: $2.1 billion. Adjusted Free Cash Flow: Negative $1.1 billion. Cash and Short-term Investments: $21.2 billion. Intel Products Revenue: $11.8 billion, slightly up sequentially. CCG Revenue: Up 3% quarter-over-quarter. DCAI Revenue: Down 5% sequentially. Intel Foundry Revenue: $4.4 billion, down 5% sequentially. Operating Profit for Intel Products: $2.7 billion, 23% of revenue. Intel Foundry Operating Loss: $3.2 billion, down $848 million sequentially. All Other Revenue: $1.1 billion, up 12% sequentially. Q3 Revenue Guidance: $12.6 billion to $13.6 billion. Q3 Gross Margin Guidance: Approximately 36%. 2025 OpEx Target: $17 billion. 2026 OpEx Target: $16 billion. 2025 Gross Capital Investment: Approximately $18 billion. Net CapEx Forecast: $8 billion to $11 billion for 2025. Warning! GuruFocus has detected 7 Warning Signs with INTC. Release Date: July 24, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Intel Corp (NASDAQ:INTC) reported Q2 revenue above the high end of its guidance, reflecting strong demand across its business. The company is making progress on its foundry strategy, focusing on building trust with customers and ensuring high-quality, reliable wafer delivery. Intel Corp (NASDAQ:INTC) is committed to improving its balance sheet, with actions taken to reduce operating expenses and improve execution. The company is focused on launching its Panther Lake SKU by year-end, which is expected to solidify its strong share in the notebook market. Intel Corp (NASDAQ:INTC) is actively engaging with external ecosystem partners to improve yield and performance targets for its Intel 18A technology. Negative Points Headline profitability was impacted by several one-time items and impairments, affecting overall financial performance. The company faces challenges in the high-end desktop market and needs to improve its position in broader hyperscale workloads. Intel Corp (NASDAQ:INTC) has decided not to continue with manufacturing projects in Germany and Poland, indicating potential setbacks in its expansion plans. The company recognized approximately $800 million of non-cash impairment and accelerated depreciation charges related to excess prior generation tools. Intel Corp (NASDAQ:INTC) is experiencing capacity constraints in Intel 7, which are expected to persist through the second half of the year. Q & A Highlights Q: Lip-Bu, how fast can you fix the x86 side of the business to build trust for the foundry business? A: Lip-Bu Tan, CEO: We are focusing on the 18A technology, with steady progress on yield and performance targets. The engagement with external ecosystem partners is helping us improve, and we are confident in launching our Panther Lake SKU by year-end. Building trust with customers involves demonstrating reliability and delivering on time and at scale. Q: Dave, can you elaborate on the reasons for the sequential decline in gross margin guidance and the outlook for next year? A: David Zinsner, CFO: The main driver is the ramp of Lunar Lake, which impacts gross margins due to the cost structure. Panther Lake's early-stage maturity also contributes to higher costs. However, as yields improve and volumes increase, we expect this to become a tailwind. Foundry gross margins are expected to expand next year, and product cost structure improvements will also help. Q: Lip-Bu, how do you address concerns about the 14A development and its impact on the foundry strategy? A: Lip-Bu Tan, CEO: We are focused on building the foundational technology for 14A and engaging with customers early in the process. We are committed to the foundry business but will only invest in CapEx when we see customer volume commitments and performance milestones met. This disciplined approach ensures we deliver reliable results to our customers. Q: Dave, what is the outlook for CapEx next year, and how much can you reduce it? A: David Zinsner, CFO: We expect CapEx to decrease next year as we digest previous investments. While maintenance CapEx is about half of our current level, we anticipate spending more than $9 billion but less than $18 billion. We will finalize our CapEx plans in early 2026. Q: Lip-Bu, can you expand on Intel's AI strategy and how it plans to compete in the market? A: Lip-Bu Tan, CEO: We are focusing on inference and agentic AI, aiming to provide a full stack solution from system software to silicon. We plan to leverage our x86 franchise and explore new architectures, including working with startups and system companies for purpose-built AI platforms. We will share more details on our strategy in the coming months. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
18-07-2025
- Business
- Yahoo
Intel Lay Offs Begin, Up to 20% of Its Factory Workforce May Be Cut
UPDATE (7/17): After multiple reports suggested Intel could lay off up to 20% of its staff, we're now seeing signs that the plan is in motion. According to The Register, recent additions to the Worker Adjustment and Retraining Notification (WARN) notices show that nearly 2,000 workers have been laid off from Folsom and Santa Clara units in California, 2,500 workers have been let go from Hillsboro and Aloha in Oregon, and nearly 700 workers have been laid off from Arizona. Texas employees have also been warned about possible layoffs, the report adds. Even in Israel, hundreds of jobs are expected to be eliminated. Original Story (6/17): Intel laid off 15,000 workers last year and is preparing for another round of cuts next month, OregonLive reports, citing an internal memo. Intel Foundry head Naga Chandrasekaran informed employees about the job cuts on Saturday. Approximately 15-20% of the company's factory workers are expected to be laid off in an effort to address its deteriorating financials. "These are difficult actions, but essential to meet our affordability challenges and the current financial position of the company. It drives pain to every individual," Chandrasekaran reportedly wrote in the memo. Intel posted flat year-on-year results in its April earnings call amid stiff competition from Nvidia and AMD. New CEO Lip-Bu Tan took charge earlier that month, and rumors about a major restructuring surfaced around the same time. Although the earlier report suggested 20% job cuts across all of Intel, the new one hints at 15-20% of the factory workforce. The chipmaker had 108,900 employees at the end of 2024. As Tom's Hardware notes, if around half of them work in factories, around 8,000 to 11,000 could lose their jobs next month. This year's job cuts may not provide employees with the buyouts that accompanied last year's, OregonLive adds. When we reached out to Intel for comment, a company spokesperson confirmed a layoff was in the works but didn't provide any specifics. "As we announced earlier this year, we are taking steps to become a leaner, faster, and more efficient company. Removing organizational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution," an Intel spokesperson tells PCMag. "We are making these decisions based on careful consideration of what's needed to position our business for the future, and we will treat people with care and respect as we complete this important work," they added.
Yahoo
18-07-2025
- Business
- Yahoo
Intel Lay Offs Begin, Up to 20% of Its Factory Workforce May Be Cut
UPDATE (7/17): After multiple reports suggested Intel could lay off up to 20% of its staff, we're now seeing signs that the plan is in motion. According to The Register, recent additions to the Worker Adjustment and Retraining Notification (WARN) notices show that nearly 2,000 workers have been laid off from Folsom and Santa Clara units in California, 2,500 workers have been let go from Hillsboro and Aloha in Oregon, and nearly 700 workers have been laid off from Arizona. Texas employees have also been warned about possible layoffs, the report adds. Even in Israel, hundreds of jobs are expected to be eliminated. Original Story (6/17): Intel laid off 15,000 workers last year and is preparing for another round of cuts next month, OregonLive reports, citing an internal memo. Intel Foundry head Naga Chandrasekaran informed employees about the job cuts on Saturday. Approximately 15-20% of the company's factory workers are expected to be laid off in an effort to address its deteriorating financials. "These are difficult actions, but essential to meet our affordability challenges and the current financial position of the company. It drives pain to every individual," Chandrasekaran reportedly wrote in the memo. Intel posted flat year-on-year results in its April earnings call amid stiff competition from Nvidia and AMD. New CEO Lip-Bu Tan took charge earlier that month, and rumors about a major restructuring surfaced around the same time. Although the earlier report suggested 20% job cuts across all of Intel, the new one hints at 15-20% of the factory workforce. The chipmaker had 108,900 employees at the end of 2024. As Tom's Hardware notes, if around half of them work in factories, around 8,000 to 11,000 could lose their jobs next month. This year's job cuts may not provide employees with the buyouts that accompanied last year's, OregonLive adds. When we reached out to Intel for comment, a company spokesperson confirmed a layoff was in the works but didn't provide any specifics. "As we announced earlier this year, we are taking steps to become a leaner, faster, and more efficient company. Removing organizational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution," an Intel spokesperson tells PCMag. "We are making these decisions based on careful consideration of what's needed to position our business for the future, and we will treat people with care and respect as we complete this important work," they added.
Yahoo
11-07-2025
- Business
- Yahoo
Intel Set to Lay Off Up to 20% of Its Factory Workforce
PCMag editors select and review products independently. If you buy through affiliate links, we may earn commissions, which help support our testing. Intel laid off 15,000 workers last year and is preparing for another round of cuts next month, OregonLive reports, citing an internal memo. Intel Foundry head Naga Chandrasekaran informed employees about the job cuts on Saturday. Approximately 15-20% of the company's factory workers are expected to be laid off in an effort to address its deteriorating financials. "These are difficult actions, but essential to meet our affordability challenges and the current financial position of the company. It drives pain to every individual," Chandrasekaran reportedly wrote in the memo. Intel posted flat year-on-year results in its April earnings call amid stiff competition from Nvidia and AMD. New CEO Lip-Bu Tan took charge earlier that month, and rumors about a major restructuring surfaced around the same time. Although the earlier report suggested 20% job cuts across all of Intel, the new one hints at 15-20% of the factory workforce. The chipmaker had 108,900 employees at the end of 2024. As Tom's Hardware notes, if around half of them work in factories, around 8,000 to 11,000 could lose their jobs next month. This year's job cuts may not provide employees with the buyouts that accompanied last year's, OregonLive adds. When we reached out to Intel for comment, a company spokesperson confirmed a layoff was in the works but didn't provide any specifics. "As we announced earlier this year, we are taking steps to become a leaner, faster, and more efficient company. Removing organizational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution," an Intel spokesperson tells PCMag. "We are making these decisions based on careful consideration of what's needed to position our business for the future, and we will treat people with care and respect as we complete this important work," they added.
