Intel faces financial headwinds and competitive pressures as it restructures operations, cuts costs, and races to catch up in AI and foundry markets.

Financial Performance and Cost Cuts

• Q1 revenue flat at $12.7B, product revenue down 3% to $11.8B; foundry division lost $2.3B2
• Guidance disappointment led to share decline; plans to cut opex to $17B by 2026 and reduce capex2
• Gross margins fell 410 bps to 36.9%, with $5.2B capex spent on foundry3
• Strategic investments may reduce profitability by 20275

Strategic Shifts and Operational Adjustments

• CEO Tan refocusing on core engineering, streamlining admin layers, targeting foundry growth3
• Layoffs and staff cuts to reduce costs4
• Outsourcing 2nm Nova Lake CPUs to TSMC to cut costs [Sources: 3,4].

AI strategy

Foundry and Manufacturing Initiatives

• Foundry Direct event on April 29 to showcase 18A process, packaging, and partner tape-outs3
• Panther Lake AI accelerator tape-outs by late 20253
• Foundry's 18A process aims to support next-gen CPUs3

Competitive Pressures

• x86 market share dropped to 58.2% from 82.5%, AMD now at 40.3%4
• TSMC's foundry competition forcing Intel to outsource 2nm to TSMC [Sources: 3,4].

Governance and Risks

• Strategic investments may reduce profitability by 20275
• Opposed shareholder proposals at annual meeting5