Struggling Chip Giant Faces Sixth Straight Quarterly Loss
Intel (INTC.O) is set to report its sixth consecutive net loss on Thursday, with revenue expected to decline for the fifth straight quarter, according to LSEG estimates. The once-dominant chipmaker has fallen behind rivals like Nvidia (NVDA.O), which leads in AI chips, and AMD (AMD.O), which is gaining ground in PC and server processors. Analysts project a Q2 net loss of $1.25 billion and a 7% sales drop to $11.92 billion—marking Intel’s worst slump since its first unprofitable year in 1986.
CEO Shifts Strategy, Risking Billions in Writedowns
New CEO Lip Bu-Tan is pivoting Intel’s contract manufacturing business toward a next-gen 14A chipmaking process, moving away from the 18A technology championed by former CEO Pat Gelsinger. While the shift aims to better compete with TSMC (2330.TW), analysts warn it could trigger massive writedowns—potentially hundreds of millions or even billions—further unsettling investors. Stifel analysts note that Tan’s long-term vision for 14A will be critical in this earnings call.
Foundry Business Faces Uphill Battle to Break Even
Intel’s foundry unit, key to its turnaround, is expected to post $4.49 billion in Q2 sales—mostly from internal production. CFO David Zinsner has projected breakeven by 2027, but this depends on attracting external customers to generate billions in revenue. The uncertainty around writedowns and adoption of 14A could delay profitability, raising doubts about Intel’s ability to reclaim its former dominance.