Today more than 15 per cent of staff are being given their pink slips and those shiny multi-billion-dollar chip facilities promised to European politicians are being quietly binned.
Intel now says it will “refocus” on AI chips, try to win back scraps of the PC market it used to own outright, and flog its mythical 14A process tech to large customers. It is yet another pivot for a company that has spent years stumbling from one half-baked strategy to the next.
Once upon a time, Intel ruled the silicon kingdom. It churned out ever-faster chips for laptops and desktops, raking in billions while PC buyers queued up for the latest shiny thing. Then the AI revolution hit. Nvidia, AMD and TSMC spotted the gold rush. Intel didn’t. While Jensen Huang and Lisa Su surfed the AI wave, Intel was too busy patting itself on the back for incremental PC updates no one cared about.
Now Lip-Bu Tan, the latest in a revolving door of CEOs, is left holding the bag. “There are no more blank checks. Every investment must make economic sense.” That’s CEO-speak for “the party’s over, and we can’t afford this mess anymore.”
Investors didn’t exactly clap. Shares dipped after hours, even though revenue for the June quarter limped in at $12.9 billion and somehow beat the cocaine nose jobs of Wall Street’s laughably low expectations. But the rot is deep. Intel lost $2.9 billion in the quarter, nearly double the previous year’s $1.6 billion loss, marking six straight quarters of failure. This is its worst streak in 35 years.
The job cuts are already underway, targeting middle management first. By year’s end, the workforce will be chopped to about 75,000. Finance chief David Zinsner tried to spin a brief demand blip as buyers rushed to dodge Trump’s new tariffs. However, this was not so much a recovery as a temporary sugar high.
Meanwhile, the fab delays are embarrassing. That much-hyped $28 billion Ohio mega-plant which was supposed to be ready this year won’t be done until after 2030. The excuse is “aligning spending with demand,” which translates to “we can’t afford this and nobody’s buying.”
Pat [kicking] Gelsinger, Tan’s predecessor, bet big on turning Intel into a chip-making service for other companies. He was egged on by Biden’s Chips Act cash. Now that dream is crumbling, and the promised subsidies look shakier by the day because Intel can’t hit its milestones.
Zinsner insists that the 18A process tech for PC chips is still the “most important thing we’re doing right now.” Panther Lake mobile processors, the first to use it, are allegedly launching this year. But the real Hail Mary is 14A, a bleeding-edge process node that Intel hopes will attract big chip designers. Problem is, it’s years away and by the time it arrives, Nvidia and TSMC will already be two nodes ahead.
Tan says Intel will focus on chips for AI models that handle decision-making and complex tasks. But Zinsner admitted the roadmap is still “being formed” (roughly translated: they don’t have one.)
This is what a slow-motion car crash looks like. Intel is still bragging about AI ambitions while losing money, cutting staff, and delaying its future. Meanwhile, Nvidia, AMD and TSMC are raking in cash and dictating the AI era’s terms.
