𝐷𝑟. 𝐼𝑎𝑛 𝐶𝑢𝑡𝑟𝑒𝑠𝑠

Other (MBLY, Altera, all others)

Revenue $1.042b, up QoQ from $1.039b
Op Margin 11.3%, up QoQ from 4.3%
Mobileye with better leverage
Altera still experiencing inventory digestion, 2H recover perhaps 

Foundry

Revenue $4.502b, up QoQ from $4.352b
Op Margin -50.2%, up QoQ from -134.3%
18A volume ramp in 2H25, yields proceeding smoothly
Margin benefits as EUV ramp matures
Margin benefits as 2H products return to Intel
Op Inc break even by end of 2027 

Other highlights:

Employee count down to 108,900 from 124,100
- That's a 12.25% reduction, but includes MBLY/Altera
First quarter with zero dividends paid
$7.68b awarded on CHIPS Act
- First $1.1b in 4Q24
- Second $1.1b in Jan 2025
18A Production ramp in Fab52

Other highlights

Full tape out of Intel 16 for external in December, volume ramp at Intel Ireland
Launch of Intel 200V with vPro, unveil of 200H, 200HX

Guidance

💵 Revenue $12.2b
📈 Gross Margin 33.8%

After Market, $INTC is up 1-2% 

From the prepared remarks

➡️ Intel Products executed to drive revenue in the quarter, even as PC inventory continued to normalize
➡️ Intel Foundry drove incremental operating efficiencies while achieving key grant-related milestones, which supported solid upside to gross margins

➡️ In client, Intel CPUs power roughly 7 out of every 10 PCs.
➡️ Intel as the market leader in AI PC CPUs
➡️ On track to ship more than 100 million cumulative systems by the end of 2025.

➡️ Launch of Panther Lake (18A lead product) in 2H 2025.
➡️ Intel Foundry is making on performance and yields.

➡️ Good progress on Clearwater Forest, first Intel 18A server product, plan to launch in 1H26.

➡️Based on industry feedback, plan to leverage Falcon Shores as an internal test chip only without bringing
it to market. !!

➡️ This will support efforts to develop a system-level solution at rack scale with Jaguar Shores to address the AI data center.

➡️ Excited by the launch of Panther Lake this year and the internal ramp of Intel 18A in the 2H that will support increased volumes and improved profitability in 2026.
➡️ The team will re-double their efforts on ease-of-porting, IP availability and best-known foundry methods.

➡️ We look forward to updating you as
RFQs become wins.
➡️ Have good momentum in advanced packaging and in our collaborations with Tower Semiconductor and  UMC.

➡️ Remain highly focused on goal of delivering break-even operating income for Intel Foundry by the end of 2027.
➡️ Financial benefits of shifting our wafer volumes from Intel 7 to Intel 18A.

➡️ Pleased to sign with the U.S. Department of Commerce a definitive agreement awarding us up to $7.86 billion in grants.
➡️ Received $1.1 billion in 24Q4
➡️ Received $1.1 billion in January of 25Q1.

We announced our intention to establish an independent subsidiary structure for Intel Foundry to provide clear governance and operational separation. 
This structure also enables us to seek additional funding options from both strategic and financial partners, which we are now actively beginning to explore.

Tempered revenue outlook based on seasonality and macro-uncertainty (tariffs)...

$INTC CEO search is progressing, but nothing new to report.

Q - Ross Seymour, Deutsche Bank: Talked about no quick fix, but a lot of things to improvee roadmap. on DCAI, is Granite closing the gap? CWF isn't being talked about 2025 for launch or revenue. What will it take and when to close gap?
A, MJ: It's going to be 1-2 years of consistent execution to bring customers back to table. GNR is good first step, it closes the gap, customers excited about it. It's competitive in volume. See that continued 2026 to Diamond. For CWF, look at DC in two buckets, P-core and E-core. CWF is more niche market, haven't seen volume materialise as quick. CWF will be 1H26, 18A is doing fine on yield and perf, but has packaging complications to push to 2026, but it will close the gap. It's a journey, not a destination.

Q: Profitability on GM QoQ on Q1, and low point of year, what's head and tailwinds?
A: For Q1, contributor will be revenue decline. Mid point down $2b on fixed cost business. But Q4 had revenue beat, the CHIPS agreement took some grant as benefit as cost to sales. Wasn't sure we were to sign in Q4 so didn't guide then, but it pushed margins up. In 1Q, Intel products GM are under pressure this year. Some parts have higher cost, such as Lunar, because mem in package, selling mem at cost, so margins for products all year. Panther will alleviate that for margins. That was always to offset for margins on foundry - see more of a mix EUV in foundry, better pricing, better cost, but also reducing period expenses part of $10b cost reduction. It doesn't really show up in Q1, more later in year. Benefits improving on foundry as mix of EUV increases through the year to Panther, then selling 18A wafers at higher margin. In 2026, panther in higher volume, big benefit to Intel.

Q - Stacy Rasgon, Bernstein: On segment guide for next Q, all products segments are down. What makes DCAI and NEX down same as CCG?
A: Little cautions on macro, that affects all markets. Seasonality across all markets, impacts Q1 as well. Combination of macro, uncertainty, and seasonality.

Q: Increased competitiveness on margins on Q1 - is that just pricing? Will that persist? How you think about competitiveness in client and DC?
A: New market entrants to CCG - we have good product, but margins are more pressured. Going to stem the market share decline in segment, going to win every socket. GNR is very positive step in competitive direction, but have to stem the tide in share loss - going to fight for every socket. Going to be aggressive and show customers can win with us.

Q: CJ Mews, Cantor Fitzgerald: Under new co-leadership, how has strategy evolved for IFS?
A: Not looking to spent ahead of success. Capex guide has come down 22-23 range to 20, that's in support of that strategy. Absolutely wow the customers, but to do that we need to be careful about promises. Deploy capital, engage with customers, do more than promised, customers and suppliers. Main goal of building world class foundry is still in place. Need for another player in this space in leading edge - especially in USA. Aligns with government. Need to generate best ROIC.

Q: 3mo ago, the goal for 2025 was FCF positive. Given Q1, what's that path?
A: We're not guiding beyond Q1, did very good job in 24 around cash from operations. While neg in 24, closer to zero than should have been given top line. More of the same in 2025, focused on cash flow from operations and others. Do expect significant offsets, more than 10b of offsets, that will help too. It's a focus. We have non-core businesses, see monetization there - see leverage of those. Altera is doing that, earnings next Q will likely say more.

Q: Joe Moore, Morgan Stanley: made reference tempering Falcon - what's behind that?
A: It comes down taking the time over the last 6 weeks to engage with teams, look at roadmaps, competitive perspective, were we're enabled. Talk to customers and competitive and right product for them. Learning from Gaudi, it's not enough to deliver the silicon - it's a complete rack scale solution. That's what we're doing to Jaguar - Falcon as a test chip will help us, but Jaguar will give the full rack scale. Seen a lot with deepseek - not one size fits all. There's a lot of IP and assets we have in Intel to address the market - CPUs, GPUs, ASICs, FPGAs - have to harness those. When there are constraints on customers, they find new ways. We need to find ways to be disruptive.

Q: Tariffs driving some pull forward - conservativeness, or proof it's happening?
A: Have a good sense on what customers need Q to Q. In a couple of instances, customers ordered more than digestion. Analytics showing they're doing that for a reason. Happening a bit in Asian region, can't really extrapolate beyond Q1, pulled some revenue into Q4 rather Q1.

Q: Tim Arcuri, UBS: GM message is 60% incremental off of 39% flat in Q4. But one timers down to march, can you level set the incrementals beyond Q1?
A: Rule of thumb, 60% in catch-up period. Can do more fall-through after stabilization. In 2025, margin pressure with Lunar. Brings down to 40-60% pull through. Then 2026, more 60%+ on panther.

Q: Took capex on low-end, there's 1-2b more in the P&L financing - what's that?
A: If you look at capex for 2025, $20b forecast, what's driving that lower is a function of better utilization of assets under construction. Philosophy was to invest ahead of what was required. We had assets under construction, over $50b, that is capital not yet deployed. So returns on invested capital, have to digest that as much as possible, and limit external purchases. That will get to $20b range. Capex is two things - what you place in orders, and when you give them the cash - we're working the payment terms of suppliers to lower our capex. That's pushing spend out as we're getting assets in. As we've deployed and assets are being depreciated, that's effectively paid.

Q: Vivek Arya, BoA: On DCAI CPU, looking Intel vs AMD, share gains are design, manufacturing? What can be fixed, what can be solved and when? Cloud vs enterprise share shifts?
A: Competitive DCAI landscape, but GNR did a good job in closing gap vs comp. Need to be laser focused on Diamond. Feedback on Diamond is great. On external manufacturing - have to have right product, right process, right market window. Intel does 30% manufacturing externally, that's the high, but it will never be zero. 18A is going well, they earned my business for Panther and CWF, but as looking at CWF, we're asking that question every time. If external for future DCAI, all about hitting the right window, right perf, for customers.

Q: Non-controlling interest - $500-700m. But then grows to 1.2-1.4b. Is this going to keep increasing? How to model this? More on foundry will reverse more?
A: It's more than SCIP - SCIP 1 and 2. MBLY also appears as we sell stakes there and Altera, it exacerbates them there. It's a number of things that makes it difficult to forecast - it depends on what share of the asset, and what the production looks like in the fabs. We felt comfortable guiding 25 and indication for 26. It's likely to go up in 27, but too early for a number.

Q: Ben Reitzes, Melius Research: In prepared remarks, mentioned Trump admin. Give detail about those talks. Have they reached out, who's leading those discussions, what are you talking about, what are they interested in?
A: Good engagement, engaged since election. We have a strong govt affairs team that engages every day. Their outlook on bringing semis to USA, it's a positive sign for Intel. We never left the US, so we're in pole position. They understand the value of R&D in the USA. They want to see more jobs coming back to the US. It's also about security, supply chain, and secure manufacturing, DoD. We're in a position to do that. As we progress, we'll engage more to make it a reality. We're meeting regularly with the admin to make their goals a reality.

Q: 1Q being the bottom - how high it goes sequentially through the year. Going to be more price aggressive in DCAI CPUs - going to balance that with outsourcing more to TSMC. Can you be more prescriptive?
A: Intend to be competitive in product space, and the cost structure is under some pressure, mostly because of Lunar. GM. There won't be a lot of lift in that unit through the year until Panther. It will allow us to relax some of that pressure. The foundry will also see improvements - more wafers will be coming back with Panther, better still in 2026. Improving cost structure in Foundry will help too. These wafers we're producing at Intel 3 and 18A have better cost and margin structure relative to predecessors. In the caveman macro, take this in the 40-60% fall through to get you to those margins.

Q: Aaron Rakers, Wells Fargo: During 1% in 2023 EUV wafer mix, that's 5% in 2024. How do you define success what the EoY 25 in wafer mix, and the delta cost structure of EUV?
A: The blended ASP cost goes up 3x 18A vs the cost. Dramatic change vs pre-EUV wafers. Not sure exit year with % EUV, but will go up. Intel 3/4 has MTL, 18A on Panther. See a meaningful jump on EUV wafers as we exit 2025.

Q: SCIP impact, $500-700 to $1.2bill, when you report EPS non-GAAP with that?
A: It's not just SCIP, it's MBLY and it will include Altera, in the NCI that's in the non-GAAP number.

Q: Srini Pajjuri, Raymond James: On foundry break even for 2027, talk about what are the assumptions behind that. Is that mostly internal wafers? What revenue do we need from External to break even?
A: Still aiming for 2027. It's really on the back of internal wafers. A lot based on EUV wafers with better margin, and as that mix improved that improves the margins. The original premise by the P&L was to drive the foundry to be more focused on efficiency, to be more sensitive to capital, and think about ROIC. I think it's worked. They completely pivoted to how to make money in that business. We'll see more efficiency as we go through 25 into 26. Good feeling to break even. But we do want external customers, some small amount assumed in there, but if there's out-perform in that mix of external vs internal, that's great. Get business to a profitable level that's market competitive.

Q: On 18A Panther, expect to bring 70% die in house? Is it set in stone, or is that flexible (more or less of die)?
A: We did move Panther inside to 18A - we look at each gen product based on right process, right market window, right method to win. We're happy on perf and yield. That will stay on 18A. As we look to Nova, that will be both inside and outside - compute from both. It's about optimizing what allows us to win and optimize the portfolio. If our customers are successful, we win.

That's a wrap! Head over to http://more-moore.com soon to see a fully rounded article on today's news, or go see my video on Intel's announcement regarding Falcon Shores becoming the de-risk element to Jaguar Shores.

https://youtu.be/Wpk18yPBruU

Today is @intel Foundry Direct Connect 2025. A 🧵

#directconnect 

Keynotes from CEO LBT, Kevin O'Buckley, and Naga. Two hours reserved!

Updates on 18A and beyond. Hopefully customers. 

Today is also about input to intle, not just announcements. LBT is committed to making Foundry successful. Strengthen roadmap and execution. 

Repeating the 1 trillion TAM semiconductor TAM by 2030 

Differentiated packaging and manufacturing technologies 

18A for panther lake. First SKU by end of 2025, more in 2026.

Enhance 14A for broader industry adoption 

Broad supply chain and ability to expand at several sites based on demand 

Current administration has made semiconductor leadership and independence a strong focus 

Intle powers most of the world's PCs and datacenters. But past achievements do not guarantee future success. 

Every customer is unique. Intle need dot make it easier to use. Faster embrace of industry EDA tools and industry standards. Four pillars in this.

IP
Digital design flow
Design for manufacturability
Design for yield 

LBT introduces CEO of @Synopsys Sassine Ghazi to the stage. 

😐😁🚀

(LBT was Ceo of Cadence for 15 years. Synopsys got the nod. That's going to be a fun discussion) 

@Synopsys Already test chips since v0.3 PDK on 18A 

@Synopsys Customers are desperate for differentiation and optionality. USA Foundry is also important. The gap between for design difficulty has shrunk, and is huge progress. 

@Synopsys Now CEO @cadence Anirudh Devgan to the stage. LBT a lot more appreciative of his time by comparison 

@Synopsys @Cadence AI is the megatrend. Online AI, physical AI. The 1 trillion number might be pessimistic. Cadence works with all the AI companies to drive the infrastructure. Applying AI to Cadence tools too. Transform chip design and PPA improvement by 20%. Worth a node jump. 

@Synopsys @Cadence How is intel Foundry different? Aside from history of Cadence with LBT, but he is customer comes first. LBT has already met main customers, but Intel has to meet more. 3DIC on Intel is leading, first to BSPDN. Best product wins. Ecosystem works together - Cadence and Intel. 

@Synopsys @Cadence What looking forward to with Intel Foundry. By 2035 even Foundry could be 500b+. Looking forward to being with Intel to that number.

@Synopsys @Cadence Now @Siemens CEO Mike Ellow to the stage. 

@Synopsys @Cadence @Siemens Mike and LBT used to work closely together. Lots of good friends at Siemens. LBT is excited to empower customers and drive industry standards. Siemens is certified on 18A, working on 18AP, started on 14A. 15+yr partnership on packaging already. 

@Synopsys @Cadence @Siemens Siemens is Co founder of Intel Foundry alliance. Siemens EDA helps with foundry reliability and translation of requirements goes into design. Ties together the ecosystem so people can stay in their environments but retain predictability. Customer centric solutions 

@Synopsys @Cadence @Siemens Emib is driving the industry. Now software defined, silicon enabled, is taking hold. Now hardware and software work together for customization. That's where 3DIC comes in. Intel Foundry has great tech platform, world class team. Great opportunity together 

@Synopsys @Cadence @Siemens The guy next to me is looking at Siemens job listings online.

@Synopsys @Cadence @Siemens Engineers are retiring. Students need access to shuttles on better nodes and make silicon to drive a new generation. A resilience industry requires a set of people and technologies to continue, to be resilient. 

@Synopsys @Cadence @Siemens Ceo of PDF Solutions John kibarian to the stage 

Intel recognized it needed to characterized design vs process. It started using PDF Solutions to help build PDKs to achieve best performance and reduce variability. Cooptimization has to start at the beginning, not in the middle. Bringing design info into manufacturing. 

Engineers have to be humble, these are tough problems. Full chain needs to collaborate, integrated analytics. PDF is the lubricant. Understanding tradeoffs as early as possible. Always have to sell products at a good price. This is a team sport.

Go team! 

Innovation drives benefit. New architectures in the foundry take time to evolve, but designers need to know how to take advantage. Engage early. Enable easy to work PDKs (and simulation tools). New nodes built with advanced packaging in mind. It's built into the PDK. 

This is a service business, built on trust. Have to be patient to build trust. Meet customer expectations. Make the ecosystem easier to work with Intel. This Intel event is all about connecting and giving feedback. 

LBT wants ideas! Post them here, I'll pass them on. 

That's the end of LBT.

Now for GM Naga Chandrasekaran.
Been at Intel 8 months, formerly Micron 

Mentions Ann Kelleher, thanks got 30 years of Intel service. Ann will retire at the end of the year.

Here's my previous interview with Ann. She's great!

https://youtu.be/SOY0Yh8y-5Q?si=unNCghQVGWOqx4Qw

$90b capex spend in last 4 years to regain competitiveness and scale as a Foundry. 