Intel Faces AI Challenges Amid Leadership Transition and Market Competition

Is iconic chip maker Intel struggling on the AI front? Release of its new chip has been delayed further; here's the reason for it

Intel, once a leader in the semiconductor industry, is facing challenges in the rapidly growing field of artificial intelligence (AI). The company had high hopes for its Gaudi accelerator chips, designed to enhance AI application performance. However, sales have not met expectations, leading Intel to withdraw its 2024 forecast of selling over $500 million worth of these chips.Intel, a renowned leader in the chip-making industry, is currently facing challenges in the rapidly growing field of artificial intelligence (AI). The company had high hopes for its Gaudi accelerator chips, designed to enhance AI application performance. However, these ambitions have encountered significant obstacles. Intel initially projected that it would sell over $500 million worth of Gaudi accelerator chips in 2024. Unfortunately, this target has not been met. CEO Pat Gelsinger explained that the shortfall is due to software-related issues and the transition from the second to the third generation of the Gaudi chips. Also Read : AI war enters next battle: After OpenAI, now Oracle launches AI agents; here's all about what it can do In the fourth quarter of 2024, Intel reported a loss of $126 million on $14.3 billion in revenue, an improvement from the previous quarter's $16.6 billion loss. Despite this progress, the company's core businesses continue to face difficulties. Intel's foundries, essential for future competitiveness, reported losses of $13.4 billion in 2024 but showed signs of recovery with a reduced $2.3 billion loss in the last quarter. To address these challenges, Intel is refocusing its product strategy into three main areas: client and edge computing, traditional data centers, and AI data centers. This includes canceling plans for the Falcon Shores chip to concentrate on the Jaguar Shores project. Despite these efforts, Intel remains behind competitors like Nvidia, which has seen a significant increase in demand for its high-end AI chips. Nvidia's success underscores the intense competition in the semiconductor industry, particularly in the AI sector. Also Read: Donald Trump's new tariffs on China, Canada, and Mexico: Will they trigger a trade war, economic shock, and soaring inflation? How is Intel performing financially? Intel reported a $126 million loss in Q4 2024 but showed some recovery in its foundries. Is Intel behind in the AI chip race? Yes, Intel is struggling against competitors like Nvidia in the AI chip market.

Chipmaker Intel beats revenue expectations amidst Q4 loss

Intel reported a fourth-quarter loss on Tuesday, but better than expected revenue as the US chip giant continues to struggle to stake its place in the artificial intelligence revolution. The company's Client Computing Group, which includes PC chips, saw revenue fall 9 percent to $8 billion in the fourth quarter.Intel reported a fourth-quarter loss on Tuesday, but better than expected revenue as the US chip giant continues to struggle to stake its place in the artificial intelligence revolution. The company posted a net loss of $126 million for the quarter ending December 28, compared to a profit of $2.67 billion in the same period last year. Revenue declined seven percent to $14.3 billion, which was slightly better than expected by analysts. The company's share price rose two percent in after-hours trading following the earnings release. "While Intel's revenue decline remains concerning, the overall results came in ahead of the most pessimistic forecasts, possibly propped by broader market and geopolitical factors," said Emarketer analyst Jacob Bourne. For the full year 2024, Intel recorded a substantial net loss of $18.8 billion, compared to a profit of $1.7 billion in 2023, largely due to restructuring charges and challenging market conditions. Intel is one of Silicon Valley's most iconic companies, but its fortunes have been eclipsed by Asian powerhouses TSMC and Samsung, which dominate the made-to-order semiconductor business. The company was also caught by surprise with the emergence of Nvidia, a graphics chip maker, as the world's preeminent AI chip provider. Last month, Intel's Chief Executive Officer Pat Gelsinger was forced out after the board lost confidence in his plans to turn the company around. His abrupt departure came after the company in August vowed to cut more than 15,000 jobs in a draconian cost reduction plan, and paused or delayed construction on several chipmaking facilities. Intel's shares fell 60 percent last year, and its market valuation is about $90 billion, just a fraction of Nvidia, which makes the premium chips that are fueling the AI boom. DeepSeek Despite the losses, interim co-CEO Michelle Johnston Holthaus highlighted positive developments. "The fourth quarter was a positive step forward as we delivered revenue, gross margin and EPS above our guidance," she said. Holthaus told analysts during an earnings call that Intel could find opportunities to capitalize on buzz generated this week by Chinese startup DeepSeek, with its powerful new chatbot developed at a fraction of the cost of its US competitors. "Because if we've seen anything this week, when there are constraints put on customers, they figure out different ways to deploy technology," Holthaus said when asked about DeepSeek. Intel has chips and other assets it can "leverage" to win over customers looking to power AI without having to resort to premium Nvidia GPUs, Holthaus argued. "That's a great opportunity, and something that I'm looking at to see if there are ways that we can be disruptive there," Holthaus said. The company's Client Computing Group, which includes PC chips, saw revenue fall 9 percent to $8 billion in the fourth quarter. However, Intel reported strong momentum in AI components for personal computers, saying it's on track to ship more than 100 million AI PCs by the end of 2025. Intel has been engaged with the new presidential administration of Donald Trump and "feels good" about the effort to promote chipmaking in the United States, according to co-chief executive David Zinsner. "This is a very positive sign, obviously, for us," Zinsner said. The earnings report came as Intel continues its search for a permanent CEO.

Intel's quarterly revenue tops expectations as investors await new CEO

Intel exceeded December-quarter expectations, but its current-quarter forecast missed predictions. The company struggles with low demand for data center chips and awaits a new CEO. Interim Co-CEO Michelle Johnston Holthaus announced a halt on a new AI chip design. Intel faces competition from Nvidia and AMD, and concerns over tariffs impacting sales.Intel on Thursday posted December-quarter results that beat analysts' low expectations, while its forecast for current-quarter revenue missed estimates as the chipmaker grapples with tepid demand for its data center chips and as investors wait for a new CEO. Shares of the Santa Clara, California-based company climbed 3.8% in after-hours trading. Last year, Intel's shares lost about 60%. The company's quarterly results and forecast were overshadowed by questions about its long-term strategy and efforts to replace former CEO Pat Gelsinger, who was ousted last month. Two interim co-CEOs currently run the former No. 1 U.S. chipmaker which is struggling to catch up to its rivals, especially AI chip maker Nvidia. As Intel undergoes a historic transition and attempts to emerge from one of its bleakest periods, it has also struggled to cash in on a boom in investment in advanced AI chips. On a conference call with investors, Co-interim CEO Michelle Johnston Holthaus said Intel was shelving its forthcoming graphics processing unit (GPU) design called Falcon Shores, leaving it with no major new products for AI customers. The company said it planned to use Falcon Shores as an internal test chip and focus on future data center AI products. In its quarterly report after the closing bell, Intel said it expects first-quarter revenue of $11.7 billion to $12.7 billion, compared with analysts' average estimate of $12.87 billion according to data compiled by LSEG. Companies looking to capitalize on generative AI technology have prioritized spending on specialized AI processors that can churn huge amounts of data, crimping demand for the traditional server processors that Intel sells. The company's outlook for slower demand was due to "normal seasonality" and potential tariffs from President Donald Trump's administration, interim co-CEO and Chief Financial Officer David Zinsner said in an interview. Zinsner said the threat of tariffs may have pushed customers to buy more of Intel's chips ahead of the first quarter to avoid higher costs should officials implement the tariffs. Zinsner said the company's goal was to ensure operating expenses were at roughly $17.5 billion for 2025. Intel last year scrapped a 2024 forecast that it would sell over $500 million worth of its new AI processors, named Gaudi, suggesting they struggled to compete against Nvidia's chips. On an adjusted, per-share basis, Intel forecast it would break even for the current quarter. Analysts expect adjusted profit of 9 cents per share. It is spending heavily to become a contract manufacturer of chips for other companies, leading some investors to worry about pressure on its cash flows. Holthaus said in an interview the "board search was progressing" in its search for a new CEO and until the pick is announced "we're focused and we know exactly what needs to be done." Investors are looking for clarity around the future of the business that a new chief executive would bring. "The absence of a new CEO announcement may contribute to investor uncertainty, as leadership stability is crucial for navigating this competitive landscape and executing turnaround plans," Running Point Capital Chief Investment Officer Michael Schulman said. Intel reported fourth-quarter revenue fell 7% from a year earlier to $14.26 billion, beating estimates of $13.81 billion. Grants Intel received related to federal CHIPS Act money were responsible for part of the company's revenue and profit margins that beat expectations in the fourth quarter, Zinsner said. The PC market - Intel's largest by revenue share - saw global shipments rise only modestly last year, underperforming analysts' expectations of a strong rebound after months of declines. The company has also been losing share in the PC and server CPU market to rival AMD, a trend analysts expect to continue into 2025.

Intel delays AI GPU, stock reacts: Is it falling further behind Nvidia?

Intel reported December-quarter results on Thursday that exceeded analysts' low expectations, while its revenue forecast for the current quarter fell short as the company faces weak demand for its data center chips and awaits a new CEO's appointment. The chipmaker, headquartered in Santa Clara, California, witnessed its shares increase by 3.8% in after-hours trading. However, Intel's shares suffered a significant decline of about 60% last year. Intel's quarterly performance and future outlook were clouded by uncertainty surrounding its long-term strategy and the search for a successor to former CEO Pat Gelsinger, who was ousted last month. Currently, the company is being led by two interim co-CEOs, Michelle Johnston Holthaus and David Zinsner, as it seeks to regain its competitive edge, notably against rivals such as Nvidia in the AI chip sector. During a conference call, Holthaus announced that Intel would postpone its upcoming graphics processing unit (GPU) design, Falcon Shores, repurposing it as an internal test chip instead of releasing it for sale. This decision means Intel currently lacks new products tailored for AI customers, shifting its focus toward future data center AI offerings. In its earnings report, Intel projected first-quarter revenue between $11.7 billion and $12.7 billion, below the analysts' average forecast of $12.87 billion based on data compiled by LSEG. The chipmaker's weaker demand outlook reflects "normal seasonality" and the potential imposition of tariffs from the previous presidential administration, Zinsner stated during an interview. He noted that the impending tariffs might have incentivized clients to purchase more chips in advance to avoid higher costs should the tariffs be enacted. Nvidia's worst week in years: Another 6% drop -- should you panic too? Intel aimed to keep operating expenses around $17.5 billion for 2025. Last year, it abandoned a forecast indicating over $500 million in sales of its new AI processors, named Gaudi, due to their poor competitive performance against Nvidia's products. On an adjusted per-share basis, Intel forecasted breakeven financial results for the ongoing quarter, while analysts anticipated a profit of 9 cents per share adjusted for various expenses. Intel is heavily investing to expand into contract manufacturing for other companies, a move that has raised concerns among investors regarding potential cash flow pressures. Holthaus confirmed that the board search for a new CEO is progressing, and emphasized their focus on executing necessary strategies until a new leader is appointed. Investors seek clarity on the company's future direction, which a new CEO could provide. Michael Schulman, Chief Investment Officer at Running Point Capital, remarked that the delay in appointing a new CEO could heighten investor uncertainty, as stable leadership is vital for navigating the current competitive environment and executing turnaround strategies. Intel's fourth-quarter revenue declined 7% year-over-year, totaling $14.26 billion, yet surpassing analysts' expectations of $13.81 billion. The company reported a net loss of $126 million, or 3 cents per share, compared to a net income of $2.67 billion, or 63 cents per share, from the same quarter the previous year. This marked Intel's first earnings announcement since the departure of Gelsinger, who faced numerous challenges during his tenure, including losing market share and falling behind in the AI race while committing substantial investments in manufacturing plants. During the fiscal fourth quarter, Intel's Client Computing Group generated $8.02 billion in revenue, down 9% year-over-year but outperforming the $7.84 billion consensus projection by analysts. The Data Center and Artificial Intelligence segment contributed $3.39 billion, a 3% decrease, aligning with the $3.38 billion consensus, while the Network and Edge unit reported $1.62 billion in revenue, a 10% increase, above the anticipated $1.5 billion. Intel finalized a $7.86 billion grant from the U.S. government to bolster manufacturing efforts in four states. The firm anticipates starting volume chip production using its 18A process technology in the second half of 2025 and plans to launch next-generation laptop chips under the codename Panther Lake within the same timeframe. In a separate development, Intel is reportedly exploring a minority stake sale in Altera, its business known for field-programmable gate array chips, which it acquired for $14.5 billion in 2015. Zinsner indicated that the process regarding Altera is advancing, and he expects to provide updates in the next quarter's earnings report. Before Thursday's trading session concluded, Intel shares had declined by 1% for the year, in contrast to a 3% increase in the S&P 500 index. Disclaimer: The content of this article is for informational purposes only and should not be construed as investment advice. We do not endorse any specific investment strategies or make recommendations regarding the purchase or sale of any securities.

Chipmaker Intel beats revenue expectations amidst Q4 loss

Intel reported a fourth-quarter loss on Tuesday, but better than expected revenue as the US chip giant continues to struggle to stake its place in the artificial intelligence revolution. The company posted a net loss of $126 million for the quarter ending December 28, compared to a profit of $2.67 billion in the same period last year. Revenue declined seven percent to $14.3 billion, which was slightly better than expected by analysts. The company's share price rose two percent in after-hours trading following the earnings release. "While Intel's revenue decline remains concerning, the overall results came in ahead of the most pessimistic forecasts, possibly propped by broader market and geopolitical factors," said Emarketer analyst Jacob Bourne. For the full year 2024, Intel recorded a substantial net loss of $18.8 billion, compared to a profit of $1.7 billion in 2023, largely due to restructuring charges and challenging market conditions. Intel is one of Silicon Valley's most iconic companies, but its fortunes have been eclipsed by Asian powerhouses TSMC and Samsung, which dominate the made-to-order semiconductor business. The company was also caught by surprise with the emergence of Nvidia, a graphics chip maker, as the world's preeminent AI chip provider. Last month, Intel's Chief Executive Officer Pat Gelsinger was forced out after the board lost confidence in his plans to turn the company around. His abrupt departure came after the company in August vowed to cut more than 15,000 jobs in a draconian cost reduction plan, and paused or delayed construction on several chipmaking facilities. Intel's shares fell 60 percent last year, and its market valuation is about $90 billion, just a fraction of Nvidia, which makes the premium chips that are fueling the AI boom. DeepSeek Despite the losses, interim co-CEO Michelle Johnston Holthaus highlighted positive developments. "The fourth quarter was a positive step forward as we delivered revenue, gross margin and EPS above our guidance," she said. Holthaus told analysts during an earnings call that Intel could find opportunities to capitalize on buzz generated this week by Chinese startup DeepSeek, with its powerful new chatbot developed at a fraction of the cost of its US competitors. "Because if we've seen anything this week, when there are constraints put on customers, they figure out different ways to deploy technology," Holthaus said when asked about DeepSeek. Intel has chips and other assets it can "leverage" to win over customers looking to power AI without having to resort to premium Nvidia GPUs, Holthaus argued. "That's a great opportunity, and something that I'm looking at to see if there are ways that we can be disruptive there," Holthaus said. The company's Client Computing Group, which includes PC chips, saw revenue fall 9 percent to $8 billion in the fourth quarter. However, Intel reported strong momentum in AI components for personal computers, saying it's on track to ship more than 100 million AI PCs by the end of 2025. Intel has been engaged with the new presidential administration of Donald Trump and "feels good" about the effort to promote chipmaking in the United States, according to co-chief executive David Zinsner. "This is a very positive sign, obviously, for us," Zinsner said. The earnings report came as Intel continues its search for a permanent CEO.

Intel's Quarterly Revenue Tops Expectations as Investors Await New CEO

Intel reported fourth-quarter revenue fell seven percent from a year ago Intel on Thursday posted December-quarter results that beat analysts' low expectations, while its forecast for current-quarter revenue missed estimates as the chipmaker grapples with tepid demand for its data center chips and as investors wait for a new CEO. Shares of the Santa Clara, California-based company climbed 3.8 percent in after-hours trading. Last year, Intel's shares lost about 60 percent. The company's quarterly results and forecast were overshadowed by questions about its long-term strategy and efforts to replace former CEO Pat Gelsinger, who was ousted last month. Two interim co-CEOs currently run the former No. 1 U.S. chipmaker which is struggling to catch up to its rivals, especially AI chip maker Nvidia. As Intel undergoes a historic transition and attempts to emerge from one of its bleakest periods, it has also struggled to cash in on a boom in investment in advanced AI chips. On a conference call with investors, Co-interim CEO Michelle Johnston Holthaus said Intel was shelving its forthcoming graphics processing unit (GPU) design called Falcon Shores, leaving it with no major new products for AI customers. The company said it planned to use Falcon Shores as an internal test chip and focus on future data center AI products. In its quarterly report after the closing bell, Intel said it expects first-quarter revenue of $11.7 billion (roughly Rs. 1,01,359 crore) to $12.7 billion (roughly Rs. 1,10,010 crore), compared with analysts' average estimate of $12.87 billion (roughly Rs. 1,11,498 crore) according to data compiled by LSEG. Companies looking to capitalise on generative AI technology have prioritised spending on specialised AI processors that can churn huge amounts of data, crimping demand for the traditional server processors that Intel sells. The company's outlook for slower demand was due to "normal seasonality" and potential tariffs from President Donald Trump's administration, interim co-CEO and Chief Financial Officer David Zinsner said in an interview. Zinsner said the threat of tariffs may have pushed customers to buy more of Intel's chips ahead of the first quarter to avoid higher costs should officials implement the tariffs. Zinsner said the company's goal was to ensure operating expenses were at roughly $17.5 billion (roughly Rs. 1,51,627 crore) for 2025. Intel last year scrapped a 2024 forecast that it would sell over $500 million (roughly Rs. 4,331 crore) worth of its new AI processors, named Gaudi, suggesting they struggled to compete against Nvidia's chips. On an adjusted, per-share basis, Intel forecast it would break even for the current quarter. Analysts expect adjusted profit of nine cents per share. It is spending heavily to become a contract manufacturer of chips for other companies, leading some investors to worry about pressure on its cash flows. Holthaus said in an interview the "board search was progressing" in its search for a new CEO and until the pick is announced "we're focused and we know exactly what needs to be done." Investors are looking for clarity around the future of the business that a new chief executive would bring. "The absence of a new CEO announcement may contribute to investor uncertainty, as leadership stability is crucial for navigating this competitive landscape and executing turnaround plans," Running Point Capital Chief Investment Officer Michael Schulman said. Intel reported fourth-quarter revenue fell seven percent from a year earlier to $14.26 billion (roughly Rs. 1,23,552 crore), beating estimates of $13.81 billion (roughly Rs. 1,19,609 crore). Grants Intel received related to federal CHIPS Act money were responsible for part of the company's revenue and profit margins that beat expectations in the fourth quarter, Zinsner said. The PC market - Intel's largest by revenue share - saw global shipments rise only modestly last year, underperforming analysts' expectations of a strong rebound after months of declines. The company has also been losing share in the PC and server CPU market to rival AMD, a trend analysts expect to continue into 2025. © Thomson Reuters 2025

Intel Curbs Falcon Shores From Market, Quarterly Revenue Falls by 7%

Intel is set to face tough questions from investors about its search for a new CEO as it announced its quarterly results on Thursday. Revenue came in at $14.26 billion, beating the projected $13.81 billion. However, revenue declined 7% year-over-year, marking the third consecutive quarter of decline. Net loss for the quarter stood at $126 million, or 3 cents per share, compared to a net income of $2.67 billion, or 63 cents per share, a year earlier. These results come as Intel grapples with falling PC demand, shrinking data centre market share, and uncertainty surrounding its leadership, as last month, it announced the retirement of CEO Pat Gelsinger after a 40-year career. Just after, the company announced David Zinsner, executive vice president and chief financial officer, and Michelle Johnston Holthaus, CEO of Intel Products, as interim co-CEOs. "Our Q1 outlook reflects seasonal weakness magnified by macro uncertainties, further inventory digestion and competitive dynamics," said Zinsner during the call. To this, Holthaus added, "Dave and I are taking actions to enhance our competitive position and create shareholder value." This raised concerns about the future of its plan to expand into contract chip manufacturing -- an initiative strongly backed by Gelsinger. The chipmaker giant reported a fourth-quarter loss per share of $(0.03) on a GAAP basis, while non-GAAP earnings per share (EPS) stood at $0.13. For the full year, GAAP EPS was deeply negative at $(4.38), with non-GAAP EPS at $(0.13). Looking ahead, Intel expects Q1 2025 revenue to be between $11.7 billion and $12.7 billion, signalling further declines. The company also said in the release that it continues to lead the AI PC category. It's on track to ship more than 100 million AI PCs by the end of 2025 and is working with more than 200 ISVs across more than 400 features to optimise its software on Intel silicon. Intel has officially scrapped plans to bring Falcon Shores to market instead of repurposing it as an internal test chip. The decision comes as the company shifts its focus towards streamlining its roadmap and concentrating resources. This is bound to challenge Intel's competitive edge in the Indian market compared to other companies like NVIDIA and AMD. "We have learned a lot as we have ramped up Gaudi, and we're applying those learnings going forward," Holthaus stated during the earnings call. "Based on industry feedback, we plan to leverage Falcon Shores as an internal test chip only without bringing it to market." The company has now acknowledged that expectations for Falcon Shores had already been toned down last month. The move aligns with Intel's strategy to develop a system-level AI data centre solution at rack scale centred around Jaguar Shores. Intel sees long-term potential in the AI data centre market but admits it is not where it wants to be today. "This is an attractive market for us over time, but I am not happy with where we are today," Holthaus said. However, the company has yet to establish a meaningful presence in the cloud-based AI data centre market. Intel is focusing on simplifying its AI roadmap and reallocating resources. Holthaus also highlighted a broader shift in Intel's AI strategy, emphasising that AI is not a traditional market but an enabling technology that must integrate seamlessly across computing environments.

Intel's stock inches up on solid earnings and revenue beat - SiliconANGLE

Shares of the troubled chipmaker Intel Corp. rose more than 3% after-hours on the back of solid fourth quarter results that topped expectations, overshadowing somewhat disappointing guidance. The company reported earnings before certain costs such as stock compensation of 13 cents per share, squeezing past Wall Street's consensus estimate of 12 cents per share. Revenue for the quarter came to $14.26 billion, up 7% from a year ago and ahead of the Street's target of $13.81 billion. All told, the company delivered a net loss of $126 million in the quarter, down from a profit of $2.67 billion in the same period one year ago. Today's report is the first since the chipmaker's board of directors successfully ousted former Chief Executive Officer Pat Gelsinger, who had struggled for years to revive the company's fortunes. He presided over an incredibly rough period, during which Intel not only missed the artificial intelligence boat, but also lost share in key markets such as personal computer and server chips. At the same time, the company has frittered away billions of dollars in building new chip manufacturing plants, with little to show for those investments. Following Gelsinger's somewhat surprising departure, Intel appointed its finance chief David Zinsner and products manager Michelle Holthaus as interim co-CEOs. Holthaus said the fourth quarter was a "positive step forward" for the company, as it delivered revenue, gross margin and earnings all above guidance. "Our renewed focus on strengthening and simplifying our product portfolio, combined with continued progress on our process roadmap, is positioning us to better serve the needs of our customers," she said. "Dave and I are taking actions to enhance our competitive position and create shareholder value." In the meantime, the company is continuing its search for a permanent CEO to succeed Gelsinger, but Zinsner said on a call with analysts there is nothing to report so far During the call, Holthaus responded to a number of questions from analysts regarding its product roadmap. Somewhat disappointingly, she said the company's Falcon Shores AI processor will only be used in servers as a test chip. Based on industry feedback, the company has no plans to launch the product for sale, she said. In 2023, Intel had pitched Falcon Shores as a potential alternative to Nvidia Corp.'s graphics processing units, which power the vast majority of AI workloads today. The chip was announced shortly after Intel stopped development of its Rialto Bridge GPUs for servers. Going forward, Intel will be pinning its AI hopes on a new product called Jaguar Shores, which is designed for a broad range of AI data center workloads, Holthaus said. Meanwhile, the company expects to achieve volume chip production for its most advanced 18A process technology by the second half of the calendar year, when it will launch its first central processing units based on that tech, code-named Panther Lake. With respect to guidance, Intel said it's expecting a breakeven profit in the first quarter, with revenue coming between $11.7 billion and $12.7 billion. Analysts had forecast a profit of 9 cents per share on sales of $12.87 billion. Zinsner told analysts the guidance reflects "seasonal weakness" that's magnified by "macro uncertainties" such as inventory digestion and competitive dynamics. He added that the prospect of tariffs also adds to the uncertainty. Breaking down the latest results, Intel's Client Computing group, which sells PC chips, generated $8.02 billion in sales, down 9% from a year ago but ahead of the Street's estimate of $7.84 billion. "While difficult to quantify, we suspect a portion of Q4 revenue upside was due to customers hedging against potential tariffs," Zinsner said. As for the Data Center and AI segment, which makes chips for cloud-based servers, revenue came to $3.39 billion, down 3% from a year ago and in-line with the Street's estimate. The Network and Edge unit added another $1.62 billion in sales, up 10% from a year ago and above the $1.5 billion consensus estimate. Mobileye Global Inc., the Intel-owned but publicly-traded manufacturer of chips for advanced driver assistance systems and autonomous vehicle technologies reported earnings separately this morning. It beat expectations, posting a profit of 13 cents per share versus the consensus estimate of 11 cents, with revenue topping $490 million, ahead of the $477.8 million analyst target. However, Mobileye's stock was down slightly in the extended trading session after it could only offer weak guidance for the upcoming year. It's calling for fiscal 2025 revenue of between $1.69 billion and $1.81 billion, some way off the Street's estimate of $1.94 billion. Amid the ongoing hunt for a new CEO, there has been a lot of speculation about what might happen to the various parts of Intel's business, with many analysts expecting the company to shed its burdensome foundry business, which continues to rack up losses. Last month, Intel said it's also planning to spin off its venture capital arm, Intel Capital, as a separate business. Intel is also trying to sell at least a minority stake in its Altera unit, which manufactures field-programmable gate arrays that can be reprogrammed to suit different computing tasks. The company shelled out $14.5 billion to acquire Altera in 2015. In an update, Zinsner said the company is "far along on the process of Altera". He added that he expects to have more to say by the time Intel delivers its next financial results in three months time. "That will help generate some cash that we can use to deliver," he promised. In the wake of Gelsinger's dismissal, there was speculation that Intel may even be acquired outright by one of its larger competitors in the chip business, with names like Qualcomm Inc. and Broadcom Inc. mentioned as possible buyers. However, Broadcom CEO Hock Tan said last month he has "no interest" in buying the company, and it's also believed that Qualcomm's interest has cooled.

Intel next-gen GPUs scrapped, E-Core Xeons delayed

Intel capped off a tumultuous year with a reality check for its product roadmaps. Plans to commercialize the American giant's next-gen GPU architecture, codenamed Falcon Shores, have been scrapped, while its next generation of many-cored CPUs has been delayed until 2026, interim co-CEO Michelle Johnston Holthaus revealed Thursday along with the biz's financial figures for 2024. Falcon Shores has undergone several transformations over the years. It was first envisioned as an XPU that would meld CPU and GPU tiles, and later pared back to a GPU that would combine Intel's Xe graphics lineage with Habana's AI chemistry. Now it seems the chip will never leave Intel's labs. We plan to leverage Falcon shores as an internal test chip only "Many of you heard me temper expectations on Falcon Shores last month," Holthaus told financial analysts on a conference call a few hours ago. "Based on industry feedback, we plan to leverage Falcon shores as an internal test chip only, without bringing it to market. This will support our efforts to develop a system-level solution at rack scale with Jaguar Shores to address the AI data center more broadly." The revelations mark the latest blow to Intel's AI ambitions for the datacenter world. Last quarter, Intel admitted its Gaudi3 accelerators had failed to deliver on the $500 million revenues forecast for 2024. "This is an attractive market for us over time, but I am not happy with where we are today," Holthaus said. "On the one hand, we have a leading position as the host CPU for AI servers, and we continue to see a significant opportunity for CPU-based inference on-prem and at the edge as AI-infused applications proliferate. "On the other hand, we're not yet participating in the cloud based AI data center market in a meaningful way." While Falcon Shores has effectively been canned, Intel's Clearwater Forest Xeons have only been delayed. The parts, slated to be among Intel's first datacenter products on its all-new 18A (1.8nm-class) process nodes, are now expected to arrive in the first half of 2026. According to Holthaus, the rationale boils down to demand for Xeons bristling with E-cores: "What we've seen is that's more of a niche market, and we haven't seen volume materialize there as fast as we expected." The decision to delay Clearwater Forest is less surprising as its original release schedule had it awkwardly close to the release of Intel's 288-core Sierra Forest Xeon 6 processors due out earlier this year. While Clearwater Forest won't make its debut this year, Holthaus insists the 18A process tech is still on track and will ramp alongside the launch of Intel's Panther Lake client CPUs in the second half of the year. "As the first volume customer of Intel 18A, I see the progress that Intel Foundry is making on performance and yield, and I look forward to being in production in the second half, as we demonstrate the benefits of our world class design," Holthaus emphasized. She also revealed that Panther Lake would be followed by a next-gen product called Nova Lake, which would utilize a mix of internal and external fab processes, meaning a reliance on non-Intel factories. Speaking of 18A, it's been nearly two months since chief exec Pat Gelsinger's abrupt "retirement" and the chipmaker has not yet named a worthy successor. "The board remains intensely focused on the search for a permanent CEO," interim co-CEO and CFO David Zinsner said on the conference call. "The search is progressing, but we have nothing new to report," he added, preemptively shutting down questions ahead of a Q&A with Wall Street. Even without a permanent CEO at the helm, Holthaus and Zinsner are pushing ahead with Gelsinger's grand plan to reinvent Intel as a manufacturing heavyweight. The CFO emphasized that building a successful foundry business requires more than competitive process technology; it needs trust from the semiconductor industry, which can take time to build. We're going to systematically attack our costs In other words, don't expect the foundry's financial situation to change overnight, though improvements are on the horizon with the impending ramp of 18A, allegedly. "We're going to systematically attack our costs and remain highly focused on our goal of delivering break even operating income for Intel foundry by the end of 2027 and we expect to demonstrate improvements this year," Zinsner said. Work in support of this goal is still ongoing. According to Intel, tool installation at its Fab 52 site in Arizona is underway to support the ramp of 18A later this year. To support this project, Intel says it collected $1.1 billion of the $7.86 billion in subsidies awarded by the US Department of Commerce late last year, and another $1.1 billion this month. In terms of foundry customers and who on Earth they are exactly, Intel remains fairly tight lipped. It claimed in December it completed a tape out of a 16nm-class design for a customer expected to begin volume production at its Ireland facility later this year. Intel is expected to share more details regarding its manufacturing ramp in late April during its second annual foundry event in San Jose, California. Compared to Intel's disastrous performance over the past few quarters, which were punctuated by multi-billion-dollar losses, missteps, and unmet promises, its final three months of 2024 were comparatively uneventful. Intel is still bleeding cash, recording a $100 million net loss in the fourth quarter, down 105 percent from the year-before's $2.7 billion profit. However, it managed to book revenues on the upper end of its guidance at $14.3 billion, albeit down seven percent year-on-year. So-called inter-segment eliminations also cost the chipmaker $4.3 billion in sales, it noted. Digging a little deeper, Intel's Client Computing Group (CCG) once again did the heavy lifting, accounting for $8 billion of the corporation's revenues for the quarter, a decline of nine percent from the year prior. The Datacenter and AI group fared a little better falling just three percent to $3.4 billion, while Intel's Networking and Edge (NEX) group was the lone bright spot in Intel's product mix with revenues growing 10 percent to $1.6 billion. However, NEX's rebound in edge demand wasn't nearly enough to overcome a six percent year-on-year decline in revenue from Intel products division in Q4. And while Zinsner remains confident in Intel's foundry fortunes, that division continues to struggle with revenues down 13 percent year-on-year to $4.5 billion and operating losses for the quarter totaling $2.26 billion, nearly twice that of Q4 2023. Despite a challenging 2024, Intel's full-year revenues were almost flat at $53.1 billion, declining two percent compared to 2023. The same can't, however, be said of profits. The past 12 months saw Intel post $18.8 billion in losses versus a tidy $1.7 billion profit the year before. Gross margins dipped to 32.7 percent from the year-ago's 40 percent. Looking ahead to Q1 2025, Intel is targeting revenues of $11.7 to $12.7 billion, with Zinsner citing regular seasonality - Q1 is slower than Q4 for sales - for the weak outlook. ®