Intel Tops Revenue Estimates but Slashes Chip Factory Plans as CEO Declares: “No More Blank Checks”
Intel delivered better-than-expected revenue results in the second quarter, but its stock dipped 5% in after-hours trading as CEO Lip-Bu Tan revealed deep cuts to the company’s chip manufacturing investments.
The semiconductor giant reported $12.86 billion in revenue, surpassing the forecast of $11.92 billion. Adjusted earnings showed a loss of 10 cents per share. For Q3, Intel projects revenue around $13.1 billion, ahead of analyst expectations, though it only expects to break even on profits.
The quarter saw a net loss of $2.9 billion, or 67 cents per share—wider than the $1.61 billion loss reported a year prior. Intel noted an $800 million impairment charge due to idle equipment, resulting in a 20-cent impact on earnings per share.
In just his second quarterly report since taking the helm in March, Tan emphasized cutting bureaucracy and reducing headcount. Intel has now completed most of its planned workforce reductions, slashing 15% of jobs and targeting an employee count of 75,000 by year’s end. The company aims to cut operating expenses by $17 billion in 2025.
Despite gaining 13% year-to-date, Intel’s stock had plunged 60% in 2024, marking its worst annual performance on record.
Tan also announced strategic pullbacks in its foundry business, which posted a $3.17 billion operating loss on $4.4 billion in revenue. Planned chip fab projects in Germany and Poland have been cancelled, and assembly operations are being consolidated in Vietnam and Malaysia. Construction of a major Ohio facility will be paced based on market demand and confirmed customer interest.
“The company expanded too aggressively without confirmed demand,” Tan stated. “This left us with a scattered and underused factory footprint.”
Future investments, including the 14A chip manufacturing process, will proceed only when supported by customer commitments. “There are no more blank checks,” Tan declared. “Every investment must justify itself economically.”
Intel’s core PC processor division brought in $7.9 billion—down 3% year-over-year—while data center revenue rose 4% to $3.9 billion. Tan said the company aims to reclaim market share in data center chips, with a new leader soon to be appointed. He also revealed he will personally approve all chip designs before manufacturing moves forward.
