Intel's revenue remains flat, losses widen to $29 billion, Chen Liwu will use three strategies to create a "new Intel"
Intel recently released its Q2 FY2025 financial results, reporting revenue of $129 billion, flat compared to the same period last year. However, due to restructuring and asset impairment, net loss widened to $29 billion, including $19 billion in restructuring charges, $800 million in equipment impairment, and $200 million in one-time costs. Intel CEO Li-Wu Chen confirmed that a further 15% reduction in workforce will be implemented by the end of this year, bringing the global workforce down to 75,000 to optimize overall production capacity. Chen also stated that the company is accelerating organizational simplification and operational efficiency improvements, focusing more on core products and AI applications, while enhancing financial discipline in its foundry business. Although the transformation will take time, Intel remains confident in its future competitiveness and profitability. CFO David Zinsner pointed out that the reduction in operating expenses and asset disposals are showing initial results. Intel aims to reduce non-GAAP operating expenses to $17 billion by FY2025 and further to $16 billion by FY2026. According to its financial report, Intel's operating cash flow in the second quarter of fiscal year 2025 was $21 billion. Client Computing (CCG) revenue reached $79 billion, a 3% decrease year-over-year; Data Center and AI (DCAI) revenue was $39 billion, a 4% increase year-over-year; Intel Foundry revenue reached $44 billion, a 3% increase year-over-year; and other business segments saw a 20% increase, reaching $11 billion in revenue. Intel also announced the suspension of its expansion plans in Germany and Poland and the consolidation of its Costa Rican assembly and testing operations to Vietnam and Malaysia. Furthermore, construction of its new Ohio plant will be slowed to adjust capital expenditures in response to market demand. Regarding products, Intel launched three sixth-generation Xeon Scalable processors for server demand, supporting AI workloads and touting compatibility with the NVIDIA DGX B300 acceleration platform. The next-generation laptop processor, codenamed "Panther Lake," is expected to begin shipping by the end of the year, and Intel's 18A process technology has already entered production in Arizona. In addition, Intel explained that it sold 57.5 million shares of Mobileye stock to revitalize assets and strengthen its financial position, raising $920 million from the sale. Intel also emphasized that it remains a major shareholder of Mobileye. Intel forecasts revenue for the third quarter of fiscal year 2025 to be between $126 billion and $136 billion, with gross margins estimated at 34.1% (GAAP) and 36.0% (non-GAAP), and a loss per share of $0.24. Three Strategies to Create a "New Intel" In a letter to internal employees, Chen Liwu explained that the company will streamline its organization and reshape its organizational culture to create a "new Intel." Chen emphasized that these measures aim to create a faster, more agile Intel with engineering innovation at its core, eliminating cumbersome bureaucratic procedures, reducing costs to free up resources, and investing in growth momentum. Intel also confirmed that it will fully implement a return-to-the-office policy starting this September. Meanwhile, Chen Liwu also explained that the company will focus on three key strategies for restructuring: • Establishing a financially disciplined wafer foundry business: In the past, excessive capital investment without fully understanding market demand led to a scattered factory layout and idle capacity. Going forward, capital expenditures will be strictly controlled, expansion plans in Germany and Poland will be discontinued, and assembly and testing operations in Costa Rica will be consolidated to Vietnam and Malaysia. The construction of the new factory in Ohio, USA, will also be delayed, adjusted according to actual customer demand. Regarding process technology, Intel will fully promote the mass production of the Intel 18A process and use this technology to support customers including the US government. The subsequent Intel 14A will be jointly designed and put into production based on specific customer needs, emphasizing that "every investment must have a reasonable return." • ...






