Jul. 28, 2025 –
Intel ‘shocked’ many market watchers last week when it reported stagnant second quarter revenues of $12.9 billion compared to $12.8 billion this time last year, while it saw losses jump from $1.6 billion to $2.9 billion.
In addition, the company said that capital expenditure, which was expected to hit $17 billion this year, would fall back to $16 billion in 2026, and that it would continue to make significant job cuts. It’s currently looking to shed around 20,000 positions this year so staff numbers should be around 75,000 employees by the end of the year.
In a note to staff Lip-Bu Tan, the company’s CEO said, “Over the past several years, the company invested too much, too soon – without adequate demand. In the process, our factory footprint became needlessly fragmented and underutilised.”
So, in a warning that surprised many, Tan went on to say that the company’s14A process would only be built if the company received confirmed customer commitments.
“There are no more blank cheques. Every investment must make economic sense,” Tan said.
That statement certainly shocked some analysts with the prospect that Intel might be forced to abandon its next-generation of advanced nodes entirely.
Intel is dramatically scaling back its chipmaking ambitions and has admitted that by halting work on 14A and future nodes its product business would increasingly become reliant on third-party foundries, particularly TSMC.
The technology being used to develop its 14A node comes from ASML and each machine – in this case the Twinscan EXE:5000/5200 tool - costs over $380 million each. So, Intel must be sure that there is real demand for the node before spending so much money.
Intel is also consolidating chip packaging into larger facilities and is rowing back on its policy of spreading operations globally for supply-chain resilience. It has also cancelled plans for new factories in Germany and Poland and has also delayed the commissioning of its Ohio fab which was originally slated to open in 2025. It has now been pushed back to 2030.