a5ca312dfc7cc092e8039c181f248be5a0219fd3de73095545078fb9b79ccb90

Intel Corporation is a global integrated device manufacturer (IDM) specializing in the design, development, manufacturing, marketing, and sale of CPUs and related solutions. Their products are utilized globally by consumers, enterprises, governments, and educational organizations, and are primarily sold to OEMs, ODMs, cloud service providers, and other manufacturers through various channels **[0000050863-24-000055_a2024ars202310k.htm:47]** **[0000050863-24-000010_intc-20231230.htm:28]**. Intel's product offerings provide end-to-end solutions, scaling from data centers to networks, PCs, edge computing, and emerging fields like AI and autonomous driving **[0000050863-24-000010_intc-20231230.htm:28]**. The company's primary CPU products include Intel Core processors for notebooks and desktops, Intel Xeon processors for data centers and AI, and Intel Atom processors for entry-level platforms **[0000050863-24-000010_intc-20231230.htm:28]** **[0000050863-24-000055_a2024ars202310k.htm:102]**.

1. **Client Computing Group (CCG)** - Focuses on end-user form factors, providing Intel Core processors for notebooks and desktops.
2. **Data Center and AI (DCAI)** - Delivers data center and AI solutions, including Intel Xeon processors.
3. **Network and Edge (NEX)** - Offers networking and edge solutions to enhance connectivity and processing at the network's edge.
4. **Mobileye** - Develops advanced driver-assistance systems and autonomous driving technologies.
5. **Intel Foundry Services (IFS)** - Provides foundry services to other manufacturers, supporting their semiconductor manufacturing needs.

91babbaafc5e12877f7a2aa5e01c23600b099b70a82c47a054ff5b2b2e799171

Unrecognized Commitment to Fund Arizona SCIP (USD Billion)

Assets Held by Arizona SCIP (USD Billion)

Net Proceeds from Sale of Interest in Ireland SCIP (USD Billion) Q2 2024

Net Proceeds from Sale of Interest in Ireland SCIP (USD Billion) Q3 2024

50c7836a26995a6c681aca3d081f002a8eaf66290500a298334fc612e1ccd779

| Segment/Quarter | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-----------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Client Computing Group (CCG) [USD Billion]** | **6.6**  **[0000050863-23-000005_q422_earningsrelease.htm:1]**  | **5.8**  **[0000050863-23-000027_q123_earningsrelease.htm:0]**  | **6.8**  **[0000050863-23-000068_q223_earningsrelease.htm:0]**  | **7.9**  **[0000050863-23-000100_q323_earningsrelease.htm:0]**  | **8.8**  **[INTC_3370902_7]**  | **7.5**  **[0000050863-24-000074_q124_earningsrelease.htm:1]**  | **7.4**  **[0000050863-24-000122_q224_earningsrelease.htm:2]**  | **7.3**  **[0000050863-24-000147_q324_earningsrelease.htm:1]**  |
| **Data Center and AI (DCAI) [USD Billion]** | **4.3**  **[0000050863-23-000005_q422_earningsrelease.htm:1]**  | **3.7**  **[0000050863-23-000027_q123_earningsrelease.htm:0]**  | **4.0**  **[0000050863-23-000068_q223_earningsrelease.htm:0]**  | **3.8**  **[0000050863-23-000100_q323_earningsrelease.htm:0]**  | **4.0**  **[INTC_3370902_7]**  | **3.0**  **[0000050863-24-000074_q124_earningsrelease.htm:1]**  | **3.0**  **[0000050863-24-000122_q224_earningsrelease.htm:2]**  | **3.3**  **[0000050863-24-000147_q324_earningsrelease.htm:1]**  |
| **Network and Edge (NEX) [USD Billion]** | **2.1**  **[0000050863-23-000005_q422_earningsrelease.htm:1]**  | **1.5**  **[0000050863-23-000027_q123_earningsrelease.htm:0]**  | **1.4**  **[0000050863-23-000068_q223_earningsrelease.htm:0]**  | **1.5**  **[0000050863-23-000100_q323_earningsrelease.htm:0]**  | **1.5**  **[INTC_3370902_7]**  | **1.4**  **[0000050863-24-000074_q124_earningsrelease.htm:1]**  | **1.3**  **[0000050863-24-000122_q224_earningsrelease.htm:2]**  | **1.5**  **[0000050863-24-000147_q324_earningsrelease.htm:1]**  |
| **Mobileye [USD Million]** | **565**  **[0000050863-23-000005_q422_earningsrelease.htm:1]**  | **458**  **[0000050863-23-000027_q123_earningsrelease.htm:0]**  | **454**  **[0000050863-23-000068_q223_earningsrelease.htm:0]**  | **530**  **[0000050863-23-000100_q323_earningsrelease.htm:0]**  | **637**  **[INTC_3370902_7]**  | **239**  **[0000050863-24-000074_q124_earningsrelease.htm:1]**  | **440**  **[0000050863-24-000122_q224_earningsrelease.htm:2]**  | **485**  **[0000050863-24-000147_q324_earningsrelease.htm:1]**  |
| **Intel Foundry Services (IFS) [USD Million]** | **319**  **[0000050863-23-000005_q422_earningsrelease.htm:1]**  | **118**  **[0000050863-23-000027_q123_earningsrelease.htm:0]**  | **232**  **[0000050863-23-000068_q223_earningsrelease.htm:0]**  | **311**  **[0000050863-23-000100_q323_earningsrelease.htm:0]**  | **291**  **[INTC_3370902_7]**  | **4.4**  **[0000050863-24-000074_q124_earningsrelease.htm:1]**  | **4.3**  **[0000050863-24-000122_q224_earningsrelease.htm:2]**  | **4.4**  **[0000050863-24-000147_q324_earningsrelease.htm:1]**  |
| **Altera [USD Million]** | N/A | N/A | N/A | N/A | N/A | **342**  **[0000050863-24-000074_q124_earningsrelease.htm:1]**  | **361**  **[0000050863-24-000122_q224_earningsrelease.htm:2]**  | **412**  **[0000050863-24-000147_q324_earningsrelease.htm:1]**  |
| **Other [USD Million]** | **247**  **[0000050863-23-000005_q422_earningsrelease.htm:1]**  | **194**  **[0000050863-24-000074_q124_earningsrelease.htm:1]**  | N/A | N/A | **178**  **[INTC_3370902_7]**  | **194**  **[0000050863-24-000074_q124_earningsrelease.htm:1]**  | **167**  **[0000050863-24-000122_q224_earningsrelease.htm:2]**  | **142**  **[0000050863-24-000147_q324_earningsrelease.htm:1]**  |

597a0a24bf3a7c404d619168c0ba648bc28cff125137c5ba7bfb2fc3ffd20424

eef9fd9ca65214148107d05bbb1a0b55066baea5fa318a6861dd92d238a0242a

1. What impact do the restructuring actions have on your R&D roadmap, long-term external Foundry opportunity, and any chipset funding, especially considering your previous projection of $15 billion in long-term value from external Foundry? Is there any impact on those growth targets due to the restructuring?  **[INTC_3395796_10]** 

2. How do you plan to execute your Foundry strategy given the CapEx cuts, particularly when considering the goal of bringing wafers back in-house to improve gross margins by 2026, while also increasing outsourcing to TSMC? Are the CapEx cuts reflecting that some of your Foundry customers are less committed?  **[INTC_3395796_18]** 

3. Given that your CPU competitor appears to be performing better in the same environment, have the core challenges facing Intel been accurately diagnosed? What is your contingency plan if cost-cutting measures alone do not address these issues?  **[INTC_3395796_9]** 

4. Are there any structural changes to your competitiveness, company structure, or long-term financial targets that necessitated the recent spending adjustments? Can you describe these structural changes and their potential impact on your financial goals?  **[INTC_3395796_11]** 

5. Regarding your customers engaged with on the 18A and 14A nodes, have you observed any changes in their commitment or project timelines? Are they still planning to ramp their programs, or have there been hesitations or delays?  **[INTC_3395796_22]** 

6d94c7357dde2b66821dd1ffca35a7decf52e3005f43dc1d0de27058996b1ab5

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

ad5e328006fd29c554bad2505e6f6b01e77ab0c0d134fbe43780799137e8b35f

aef61d83c503a904b65ec89c720e6d8a58b3e863962e06b160b28045be504763

- TSMC: Mentioned as a well-established competitor in the third-party foundry business  **[0000050863-24-000010_intc-20231230.htm:61]** .
- Samsung: Mentioned as a well-established competitor in the third-party foundry business  **[0000050863-24-000010_intc-20231230.htm:61]** .
- Global Foundries (GF): Mentioned as a well-established competitor in the third-party foundry business  **[0000050863-24-000010_intc-20231230.htm:61]** .
- United Microelectronics Corporation (UMC): Mentioned as a well-established competitor in the third-party foundry business  **[0000050863-24-000010_intc-20231230.htm:61]** .
- Semiconductor Manufacturing International Corporation (SMIC): Mentioned as a well-established competitor in the third-party foundry business  **[0000050863-24-000010_intc-20231230.htm:61]** .
- AMD: Mentioned as a competitor offering platform products  **[0000050863-24-000010_intc-20231230.htm:59]** .
- Qualcomm: Mentioned as a competitor offering platform products  **[0000050863-24-000010_intc-20231230.htm:59]** .
- NVIDIA: Mentioned as a competitor offering accelerator products such as GPUs  **[0000050863-24-000010_intc-20231230.htm:59]** .
- ARM architecture: Mentioned as a competing computing architecture and platform  **[0000050863-24-000010_intc-20231230.htm:59]** .
- Apple: Mentioned as a competitor using internally developed ARM-based semiconductor designs  **[0000050863-24-000010_intc-20231230.htm:59]** .

10fd5c98e416579bcfd80791cd304680641788cc6cdfa40917c7c3949db5d13c

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q3 2024
- **Guidance**:
  - **Revenue**: $12.5 billion to $13.5 billion, midpoint $13 billion  **[INTC_3395796_7]** .
  - **Gross Margin**: Approximately 38%  **[INTC_3395796_7]** .
  - **Tax Rate**: 13%  **[INTC_3395796_7]** .
  - **EPS**: Negative $0.03 on a non-GAAP basis  **[INTC_3395796_7]** .
  - **Operating Expenses (OpEx)**: Approximately $17.5 billion for 2025  **[INTC_3395796_7]** .
  - **Net Capital Expenditure (CapEx)**: $11 billion to $13 billion for 2024  **[INTC_3395796_7]** .
  - **Adjusted Free Cash Flow**: Modestly negative  **[INTC_3395796_7]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024
- **Guidance**:
  - **Revenue**: $12.5 billion to $13.5 billion, midpoint $13 billion  **[INTC_3395796_7]** .
  - **Gross Margin**: Approximately 38%  **[INTC_3395796_7]** .
  - **Tax Rate**: 13%  **[INTC_3395796_7]** .
  - **EPS**: Negative $0.03 on a non-GAAP basis  **[INTC_3395796_7]** .
  - **Operating Expenses (OpEx)**: Approximately $17.5 billion in 2025  **[INTC_3395796_7]** .
  - **Net Capital Expenditure (CapEx)**: $11 billion to $13 billion in 2024, $12 billion to $14 billion in 2025  **[INTC_3395796_7]** .
  - **Adjusted Free Cash Flow**: Modestly negative in 2024, positive in 2025  **[INTC_3395796_7]** .
  - **Headcount Reduction**: Greater than 15% by end of 2025  **[INTC_3395796_1]** .
  - **Gross Capital Spending**: $25 billion to $27 billion in 2024, $20 billion to $23 billion in 2025  **[INTC_3395796_1]** .
  - **Non-variable Cost of Sales**: $1 billion savings in 2025  **[INTC_3395796_1]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024
- **Guidance**:
  - **Revenue**: $12.5 billion to $13.5 billion  **[INTC_3385075_7]** .
  - **Gross Margin**: Approximately 43.5%  **[INTC_3385075_7]** .
  - **Tax Rate**: 13%  **[INTC_3385075_7]** .
  - **EPS**: $0.10 on a non-GAAP basis  **[INTC_3385075_7]** .
  - **Growth Expectations**: Across all segments in the second half of the year  **[INTC_3385075_7]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024
- **Guidance**:
  - **Revenue**: $12.2 billion to $13.2 billion, midpoint $12.7 billion  **[INTC_3370902_8]** .
  - **Gross Margin**: Approximately 44.5%  **[INTC_3370902_8]** .
  - **Tax Rate**: 13%  **[INTC_3370902_8]** .
  - **EPS**: $0.13  **[INTC_3370902_8]** .
  - **Data Center Revenue**: Expected to decline double-digit percent sequentially in Q1  **[INTC_3370902_8]** .
  - **Consolidated Revenue**: Expected to grow beyond typical seasonality after a soft Q1  **[INTC_3370902_8]** .
  - **Adjusted Free Cash Flow**: Roughly breakeven for the year  **[INTC_3370902_8]** .
  - **Depreciation**: Expected to grow by approximately $2 billion in 2024  **[INTC_3370902_8]** .

fe4e67fb4a309ae1e53a1d4861883bc006b9d5bdfc30cc518ffea98cb597936c

83270d3471fa832f6e2bde0fbdc6364b355dcdf9868cdcd670d59976b9a80b51

- Total Revenue: $14.260B (-7% YoY)  **[0000050863-24-000010_intc-20231230.htm:108]** **[0000050863-25-000004_q424_earningsrelease.htm:5]**   
- Client Computing Group: $8.017B (-9% YoY)  **[0000050863-24-000010_intc-20231230.htm:124]** **[0000050863-25-000004_q424_earningsrelease.htm:1]**   
- Data Center and AI: $3.387B (-15% YoY)  **[0000050863-24-000010_intc-20231230.htm:124]** **[0000050863-25-000004_q424_earningsrelease.htm:1]**   
- Network and Edge: $1.623B (+10% YoY)  **[0000050863-24-000010_intc-20231230.htm:124]** **[0000050863-25-000004_q424_earningsrelease.htm:1]**   
- Intel Foundry: $4.502B (**+1447% YoY**)  **[0000050863-24-000010_intc-20231230.htm:124]** **[0000050863-25-000004_q424_earningsrelease.htm:1]**   
- Net Income: -$126M (down from $2.66B)  **[0000050863-24-000010_intc-20231230.htm:108]** **[0000050863-25-000004_q424_earningsrelease.htm:5]**   
- Operating Income: $412M (down from $2.585B)  **[0000050863-24-000010_intc-20231230.htm:108]** **[0000050863-25-000004_q424_earningsrelease.htm:5]**   

dd5c420936188001d8459edbd5e60f4040d059c9c34fb66d6d680fa332c19762

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

**Quarterly guidance for Q3 2024:**
- **Revenue**: $12.5B to $13.5B, midpoint $13B  **[INTC_3395796_7]**  (no change from prior guidance  **[INTC_3395796_1]** )  
- **Gross Margin**: Approximately 38%  **[INTC_3395796_7]**  (no change from prior guidance  **[INTC_3395796_1]** )  
- **Tax Rate**: 13%  **[INTC_3395796_7]**  (no change from prior guidance  **[INTC_3395796_1]** )  
- **EPS**: Negative $0.03 on a non-GAAP basis  **[INTC_3395796_7]**  (no change from prior guidance  **[INTC_3395796_1]** )  

**Annual guidance for 2024:**
- **Net Capital Expenditure (CapEx)**: $11B to $13B  **[INTC_3395796_7]**  (no change from prior guidance  **[INTC_3395796_1]** )  
- **Adjusted Free Cash Flow**: Modestly negative  **[INTC_3395796_7]**  (no change from prior guidance  **[INTC_3395796_1]** )  

**Annual guidance for 2025:**
- **Operating Expenses (OpEx)**: Approximately $17.5B  **[INTC_3395796_7]**  (no change from prior guidance  **[INTC_3395796_1]** )  

 **[INTC_3395796_7]**  = Guidance from Q3 2024 issued period  
 **[INTC_3395796_1]**  = Guidance from Q2 2024 issued period  

fb1b204985fe80597095b4825f7b0a9584f3a61a6e5d4779742738d2a23cef51

12ec499f3aca8d2391a98dd63ddd0edf48392eda19576c783798df45b90379df

| Name                       | Position                                                                 | Start Date          | Short Bio                                                                                                                                                                                                 |
|----------------------------|--------------------------------------------------------------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Patrick P. Gelsinger       | Chief Executive Officer and Director                                     | February 2021       | Patrick P. Gelsinger has over 40 years of experience in the semiconductor, software, and cloud computing industries. He was previously the CEO of VMware, Inc. and held senior roles at EMC Corp  **[0000050863-24-000010_intc-20231230.htm:102]** **[0000050863-24-000057_intc-20240327.htm:28]** **[0000050863-24-000057_intc-20240327.htm:19]** .                                      |
| Michelle Johnston Holthaus | Executive Vice President and General Manager, Client Computing Group     | April 2022          | Michelle Johnston Holthaus oversees the client business at Intel, including strategy, financial performance, and product development. She joined Intel in 1996 and has held various roles in sales and marketing  **[0000050863-24-000055_a2024ars202310k.htm:145]** **[0000050863-24-000010_intc-20231230.htm:102]** .                        |
| April Miller Boise         | Executive Vice President, Chief Legal Officer and Corporate Secretary    | July 2022 (Legal Officer), August 2022 (Secretary) | April Miller Boise leads Intel's global legal, trade, and government affairs team. She has over 25 years of experience in legal and executive leadership roles, including at Eaton Corporation  **[0000050863-24-000055_a2024ars202310k.htm:145]** **[0000050863-24-000010_intc-20231230.htm:102]** .                                           |
| Christoph Schell           | Executive Vice President, Chief Commercial Officer                       | March 14, 2022      | Christoph Schell oversees Intel's global sales, business management, marketing, communications, corporate planning, customer support, and customer success teams. He was previously the Chief Commercial Officer at HP Inc.  **[0000050863-24-000010_intc-20231230.htm:102]** **[0000050863-23-000021_intc-20230327.htm:110]** **[0000050863-23-000006_intc-20221231.htm:109]** .          |
| David Zinsner              | Executive Vice President, Chief Financial Officer                        | January 17, 2022    | David Zinsner oversees Intel's global finance organization. He has over 25 years of financial and operational experience, having previously served as CFO at Micron Technology, Inc.  **[0000050863-24-000173_intc-20241201.htm:2]** **[0000050863-24-000055_a2024ars202310k.htm:146]** **[0000050863-23-000021_intc-20230327.htm:110]** .                                                  |
| Michelle Johnston Holthaus | Interim Co-Chief Executive Officer, CEO of Intel Products                | December 1, 2024    | Michelle Johnston Holthaus has been serving as Interim Co-CEO and CEO of Intel Products since December 2024. She has held various management roles at Intel since 1996, including EVP and GM of the Client Computing Group  **[0000050863-24-000173_intc-20241201.htm:1]** **[0000050863-24-000173_a12012024form8-kex991.htm:1]** **[0000050863-24-000173_a12012024form8-kex991.htm:2]** .          |
| David Zinsner              | Interim Co-Chief Executive Officer, Executive Vice President, CFO        | December 1, 2024    | David Zinsner has been serving as Interim Co-CEO and EVP, CFO since December 2024. He initially joined Intel as EVP and CFO in January 2022 and has extensive experience in the semiconductors and technology industries  **[0000050863-24-000173_intc-20241201.htm:2]** **[0000050863-24-000173_a12012024form8-kex991.htm:1]** **[0000050863-24-000173_a12012024form8-kex991.htm:2]** **[0000050863-24-000173_intc-20241201.htm:1]** .          |
| Frank Yeary                | Interim Executive Chair of the Board                                     | January 2023        | Frank D. Yeary has been a member of Intel's board since 2009 and was appointed as the independent Board Chair in January 2023. He has a background in investment banking and finance and co-founded CamberView Partners  **[0000050863-24-000173_a12012024form8-kex991.htm:1]** **[0000050863-23-000021_intc-20230327.htm:66]** **[0000050863-23-000021_intc-20230327.htm:21]** .             |

057e6b46fb7ee041c3c4522112ba78683bec05aff2b9a11cc790abef9c4fea71

| Program Details          | Program 1      |
|--------------------------|----------------|
| Approval Date            | **2005**  **[0000050863-24-000149_intc-20240928.htm:59]**    |
| End Date/Duration        | N/A            |
| Total additional amount  | N/A            |
| Remaining authorization amount | **$7.2 billion**  **[0000050863-24-000149_intc-20240928.htm:59]**  |
| Details                  | Part of Intel's capital allocation strategy, focusing on returning excess cash to stockholders through dividends and stock repurchases. Recent focus has shifted towards investing in business and capacity expansion.  **[0000050863-24-000010_intc-20231230.htm:89]** **[0000050863-24-000010_intc-20231230.htm:100]** **[0000050863-23-000006_intc-20221231.htm:14]**  |

bcfb5bbe9522457fc3f2bac5291e7948da799b3cbb5786d36b770961884ebe72

China

Singapore

United States

Taiwan

Other regions

Japan

Other countries

Total Revenue

4e4a43aa101fb6ba367bee9845f2295d51ec2ce4ff0cd53052b8897404e04b48

- **Intel is aggressively focusing on regaining market share in both client and data center segments**, aiming to "win every socket" and demonstrating commitment to stem market share decline, which could drive revenue growth.  **[INTC_3413903_12]**
- **Intel's next-generation client product, Panther Lake, will be produced using their advanced 18A process node**, indicating confidence in their process technology, potentially improving product competitiveness and margins.  **[INTC_3413903_25]**
- **Intel Foundry Services (IFS) expects to improve its cost structure and margins in 2025**, with more wafers coming back in-house and better cost structure on Intel 3 and 18A nodes, enhancing profitability.  **[INTC_3413903_21]**

9ab0debbdad03f57db7e3228b9b1732683d01eda82df8ba9b6d55145a2f82f74

- **Increased competition and pricing pressure are expected to weigh on Intel's gross margins throughout 2025, particularly in the client computing group (CCG) and data center markets.** Michelle Holthaus stated that Intel is facing "increased competition as we see new market entrants particularly come into CCG," leading to "more pressured" margins due to the cost of products like Lunar Lake. Additionally, Intel will be "fighting for every socket" to stem market share decline, which may require aggressive pricing strategies that could further compress margins.  **[INTC_3413903_12]**
- **Artificially elevated Q4 revenue due to tariff-related pull-ins may lead to weaker demand in future quarters.** David Zinsner noted that customers may have pulled forward orders into Q4 as a hedge against potential tariffs: "customers ordered more than we think they were digesting...I just thought it was a little bit of hedging going on by customers that pulled revenue into the fourth quarter and away from the first quarter." This could result in softness in subsequent quarters as the pull-forward effects reverse.  **[INTC_3413903_15]**
- **Ongoing cost pressures and limited gross margin improvement in 2025 due to high manufacturing costs and product mix, particularly with products like Lunar Lake.** David Zinsner mentioned that "there won't be a lot of lift in that business unit through the year" due to cost structure pressure from Lunar Lake, and significant margin improvements may not materialize until products like Panther Lake ramp up in 2026.  **[INTC_3413903_21]**

a39c42c3ff9796192b623802492fa939d96d0169d52356abb2b96dd927a8783d

1. **Margin Outlook**  
   **Q:** What's the gross margin outlook for 2025?  
   **A:** David Zinsner explained that margins will be under pressure due to higher costs, especially from **Lunar Lake**, but they expect improvement as **Panther Lake** ramps in 2026.  **[INTC_3413903_10]** **[INTC_3413903_16]**  They project a fall-through in the range of **40% to 60%** for 2025, returning to **60%** or more in 2026.  **[INTC_3413903_16]** 

2. **Data Center Competitiveness**  
   **Q:** How will Intel close the data center gap?  
   **A:** Michelle Holthaus acknowledged a gap with competitors but stated that **Granite Rapids** is a first step in closing it.  **[INTC_3413903_9]**  They are focused on consistent execution and may consider external manufacturing for data center products if it helps meet market needs.  **[INTC_3413903_19]** 

3. **CapEx Reduction**  
   **Q:** Is CapEx really coming down this year?  
   **A:** David Zinsner confirmed that CapEx guidance is reduced to **$20 billion**, driven by better utilization of existing assets under construction.  **[INTC_3413903_18]**  They're limiting external purchases and adjusting payment terms, but not using any unusual financing methods.  **[INTC_3413903_18]** 

4. **Free Cash Flow Path**  
   **Q:** How will you turn free cash flow positive?  
   **A:** David Zinsner stated they are focusing on cash flow from operations, managing working capital, and adjusting CapEx.  **[INTC_3413903_14]**  They expect over **$10 billion** in offsets and aim to improve adjusted free cash flow for 2025.  **[INTC_3413903_14]** 

5. **Foundry Breakeven Target**  
   **Q:** How will you achieve foundry breakeven in 2027?  
   **A:** David Zinsner said they're aiming for breakeven primarily through internal wafers, benefiting from higher-margin **EUV wafers**.  **[INTC_3413903_24]**  They expect a small contribution from external customers but are focused on improving efficiency and cost structure.  **[INTC_3413903_24]** 

6. **Pricing and Competitiveness**  
   **Q:** Will margin pressure from competition persist?  
   **A:** Michelle Holthaus noted increased competition and the need to be aggressive in pricing to win share in client and data center markets, which may put ongoing pressure on margins.  **[INTC_3413903_12]** 

7. **EUV Wafer Mix Increase**  
   **Q:** What is the outlook for EUV wafer mix?  
   **A:** David Zinsner stated that EUV wafer mix will significantly increase, with products like **Panther Lake** on the **18A node**.  **[INTC_3413903_22]**  EUV wafers have better pricing, with the price increasing **3x** relative to cost, improving gross margins.  **[INTC_3413903_22]** 

8. **Strategy Evolution for IFS**  
   **Q:** How has IFS strategy evolved?  
   **A:** David Zinsner explained they are cautious about spending ahead of success, focusing on capital efficiency, and committed to building a world-class foundry without overinvesting.  **[INTC_3413903_13]** 

9. **Tariff Impact on Revenue**  
   **Q:** Have tariffs affected revenue timing?  
   **A:** David Zinsner observed that some customers pulled forward orders, possibly due to tariff concerns, particularly in Asia, which may have shifted revenue into Q4 from Q1.  **[INTC_3413903_15]** 

10. **Non-Controlling Interest Impact**  
    **Q:** How to model non-controlling interest in EPS?  
    **A:** David Zinsner explained that non-controlling interest includes Mobileye and SCIPs, and it will increase as they sell stakes in businesses.  **[INTC_3413903_19]**  It affects both GAAP and non-GAAP EPS, but exact forecasting is difficult beyond guided figures.  **[INTC_3413903_19]** 

11. **Adjustment to Falcon Shores**  
    **Q:** What's behind the Falcon Shores adjustment?  
    **A:** Michelle Holthaus decided to adjust plans for Falcon Shores after reviewing roadmaps and customer needs, focusing on providing a full rack-scale solution with **Jaguar Shores** instead.  **[INTC_3413903_14]** 

12. **Engagement with Government**  
    **Q:** How are you working with the Trump administration?  
    **A:** David Zinsner noted positive engagement, emphasizing alignment on bringing semiconductor manufacturing back to the U.S., which supports national security and job creation.  **[INTC_3413903_20]** 

13. **Outsourcing Considerations**  
    **Q:** Will you outsource more to external foundries?  
    **A:** Michelle Holthaus said they are open to external manufacturing for future designs if it helps meet market needs and allows customers to win, balancing internal and external production.  **[INTC_3413903_19]** 

14. **Client Market Share**  
    **Q:** How will you address client share decline?  
    **A:** Michelle Holthaus emphasized the importance of stemming market share loss in client computing by being aggressive and winning every socket, despite margin pressures from products like Lunar Lake.  **[INTC_3413903_12]** 

15. **SCIP Impact on EPS**  
    **Q:** How does SCIP affect EPS modeling?  
    **A:** David Zinsner clarified that SCIP and other non-controlling interests are taken against non-GAAP EPS, and as they sell stakes in businesses like Mobileye and potentially Altera, NCI increases.  **[INTC_3413903_23]** 

2662137239c1cc0124a4c64c2e85018c6818fe796fd68a96bc47a09e26ee415a

Intel targets 40–60% gross margins in 2025, returning above 60% in 2026 as Panther Lake on 18A ramps, but watch near-term softness after tariff pull-ins boosted Q4. Management aims to “win every socket,” though aggressive pricing may pressure margins.

dad82c40c9adc6d8b2396e38f1fce75b6e4261a9727cb80b7de5f1d99bfbff58

4212f1aece27f7a458e20ca630f8c5fe3ec3b7074c21f024d83afe2fef6f81ed

**Quarterly guidance for Q1 2025:**  
- **Revenue**: $11.7B to $12.7B  **[INTC_3413903_7]**  (lowered from $13.3B to $14.3B  **[INTC_3405233_6]** )  
- **Gross margin**: 36%  **[INTC_3413903_7]**  (lowered from 39.5%  **[INTC_3405233_6]** )  
- **Tax rate**: 12%  **[INTC_3413903_7]**  (lowered from 13%  **[INTC_3405233_6]** )  
- **EPS**: breakeven  **[INTC_3413903_7]**  (lowered from $0.12  **[INTC_3405233_6]** )  
- **Intel Foundry revenue**: flat to down modestly  **[INTC_3413903_7]**  (no prior guidance)  
- **Revenue decline across segments**: expected  **[INTC_3413903_7]**  (no prior guidance)  

**Annual guidance for FY 2025:**  
- **Operating expenses (OpEx)**: $17.5B  **[INTC_3413903_7]**  (no change from $17.5B  **[INTC_3405233_6]** )  
- **Noncontrolling interest (NCI)**: $500M to $700M  **[INTC_3413903_7]**  (lowered from $700M  **[INTC_3405233_6]** )  
- **10% increase in depreciation**:  **[INTC_3413903_7]**  (no prior guidance)  

5a187ffafcb255241b1cf34edc6ed0e0fdd460bf0efa7220d8faaf4ee5972a1b

424f8d7fc8c4d442d0bf62425e35f87c57e25ce9be925ff154b547b22e0a2816

| Name              | Start Date | End Date | Reason for Change |
|-------------------|------------|----------|-------------------|
| Ernst & Young LLP | 1968  **[0000050863-24-000010_intc-20231230.htm:106]**    | Present  | Current auditor   |

238a5c65903e66f1e8b750fe85ab5c3e32aafdd023bd64f5bddf04714efb542f

cef3f887e09e95ee8f675404325b852d85b5795336fd00c139ced3301491b52e

- Total Revenue: $13,284 million (-6% YoY vs. $14,158 million)  **[0000050863-24-000149_intc-20240928.htm:42]** **[0000050863-24-000149_intc-20240928.htm:13]** **[0000050863-23-000103_intc-20230930.htm:32]** **[0000050863-23-000103_intc-20230930.htm:10]**   
- Client Computing Group: $7,330 million (-7% YoY vs. $7,867 million)  **[0000050863-24-000149_intc-20240928.htm:13]** **[0000050863-23-000103_intc-20230930.htm:32]** **[0000050863-23-000103_intc-20230930.htm:10]**   
  • Desktop: $2,070 million (-25% YoY)  **[0000050863-24-000149_intc-20240928.htm:13]** **[0000050863-23-000103_intc-20230930.htm:32]** **[0000050863-23-000103_intc-20230930.htm:10]**   
  • Notebook: $4,888 million (+9% YoY)  **[0000050863-24-000149_intc-20240928.htm:13]** **[0000050863-23-000103_intc-20230930.htm:32]** **[0000050863-23-000103_intc-20230930.htm:10]**   
- Data Center and AI: $3,349 million (-12% YoY vs. $3,814 million)  **[0000050863-24-000149_intc-20240928.htm:13]** **[0000050863-23-000103_intc-20230930.htm:32]** **[0000050863-23-000103_intc-20230930.htm:10]**   
- Intel Foundry: **$4,352 million (+1300% YoY vs. $311 million)**  **[0000050863-24-000149_intc-20240928.htm:13]** **[0000050863-23-000103_intc-20230930.htm:32]** **[0000050863-23-000103_intc-20230930.htm:10]**   
- All Other: $1,039 million (+458% YoY vs. $186 million)  **[0000050863-24-000149_intc-20240928.htm:13]** **[0000050863-23-000103_intc-20230930.htm:32]** **[0000050863-23-000103_intc-20230930.htm:10]**   
- Net Income: **-$16,989 million (down from $31 million YoY)**  **[0000050863-24-000149_intc-20240928.htm:42]** **[0000050863-24-000149_intc-20240928.htm:7]** **[0000050863-23-000103_intc-20230930.htm:6]** **[0000050863-23-000103_intc-20230930.htm:7]**   

bcba9816b13a0bfc1283c750968268c4a266452042c5448bdde3afeb2c894e77

1. **Impact of Restructuring on Strategy**  
   **Q:** Do restructuring actions affect your R&D, Foundry plans, CHIPS funding?  
   **A:** Our strategy remains on track despite restructuring. We're confident in executing CHIPS Act milestones and maintaining our **$15 billion** long-term Foundry revenue target by the end of the decade. We're focusing on capital efficiency and aligning investments to market conditions.

2. **Spending Cuts and Structural Changes**  
   **Q:** Are spending cuts leading to structural changes impacting competitiveness and targets?  
   **A:** We're undertaking a clean-sheet analysis to become a world-class Foundry and fabless company. We've identified inefficiencies and are making significant structural changes to improve capital footprint and efficiency. Despite these changes, we believe our long-term financial goals are still achievable.

3. **Gross Margin Outlook Beyond '25**  
   **Q:** How should we think about gross margins beyond '25 amid investments and outsourcing?  
   **A:** In **2026**, we'll shift back to internal manufacturing, bringing more wafers in-house, which will meaningfully improve our cost structure. CapEx adjustments will benefit us as depreciation becomes less of a headwind. We expect **2026** to be a good year for gross margins, supported by leading-edge wafers and competitive products.

4. **Server Roadmap Competitiveness**  
   **Q:** Where does shipping Sierra Forest and Granite Rapids put you competitively?  
   **A:** Early feedback on **Sierra Forest** is very positive, offering over **25% TCO** value to customers. **Granite Rapids** begins ramping this quarter with encouraging signs. **Clearwater Forest** on **18A** is showing excellent progress. We believe our roadmap enhances competitiveness and stabilizes our market share.

5. **Foundry Strategy Amid CapEx Cuts**  
   **Q:** How can you execute Foundry plans with lower CapEx and increased outsourcing?  
   **A:** Our Foundry strategy remains unchanged. We're aligning capacity to committed orders and focusing on capital efficiency. Having completed major investments to catch up, we're now harvesting those investments. Success in advanced packaging, which requires less capital, is progressing well.

45af41843abc8ae35ef37003bad5e036bd32e86a449152a1f7bb061275390579

- **Intel anticipates significant start-up costs in 2024 due to their aggressive '5 nodes in 4 years' plan, which will be a huge headwind on margins.**  **[INTC_3370902_12]**
- **The company is guiding to the low end of seasonality in Q1 for core businesses, suggesting weaker demand than expected despite abating cyclical pressures.**  **[INTC_3370902_10]**
- **Persistent capacity utilization challenges are expected until new products ramp up, potentially not until 2026, which may impact profitability.**  **[INTC_3370902_13]**

b0666161b34b6f5cb94c6ee19e41e2fbd8fb75b5cd08afcd639b67ef4712c6f0

34bcf66eff7af498e29e0eb31bac39354c04f577e378814801755da6268a0d7b

Reductions in headcount (employees)

ff5f51b8342c0f1a07bdb5f7a43631337db6867f247bf7d997c9944f4f482e32

| Year | Amount Due (in Millions) | Debt Type                  | Interest Rate (%) | % of Total Debt                                                                 |
|----------|------------------------------|---------------------------------|-----------------------|------------------------------------------------------------------------------------|
| 2025     | 3,750 **[0000050863-25-000009_intc-20241228.htm:133]**                | Fixed-rate senior notes        | 3.40-3.70 **[0000050863-25-000009_intc-20241228.htm:132]**    | 7.5% = (3,750 / 50,011) * 100 **[0000050863-25-000009_intc-20241228.htm:133]** **[0000050863-25-000009_intc-20241228.htm:42]**                                     |
| 2026     | 2,500 **[0000050863-25-000009_intc-20241228.htm:133]**                | Fixed-rate senior notes        | 2.60-4.88 **[0000050863-25-000009_intc-20241228.htm:132]**    | 5.0% = (2,500 / 50,011) * 100 **[0000050863-25-000009_intc-20241228.htm:133]** **[0000050863-25-000009_intc-20241228.htm:42]**                                     |
| 2027     | 3,826 **[0000050863-25-000009_intc-20241228.htm:133]**                | Fixed-rate senior notes        | 3.15-3.75 **[0000050863-25-000009_intc-20241228.htm:132]**    | 7.7% = (3,826 / 50,011) * 100 **[0000050863-25-000009_intc-20241228.htm:133]** **[0000050863-25-000009_intc-20241228.htm:42]**                                     |
| 2028     | 3,173 **[0000050863-25-000009_intc-20241228.htm:133]**                | Fixed-rate senior notes        | 1.60-4.88 **[0000050863-25-000009_intc-20241228.htm:132]**    | 6.3% = (3,173 / 50,011) * 100 **[0000050863-25-000009_intc-20241228.htm:133]** **[0000050863-25-000009_intc-20241228.htm:42]**                                     |
| 2029     | 3,288 **[0000050863-25-000009_intc-20241228.htm:133]**                | Fixed-rate senior notes        | 2.45-4.00 **[0000050863-25-000009_intc-20241228.htm:132]**    | 6.6% = (3,288 / 50,011) * 100 **[0000050863-25-000009_intc-20241228.htm:133]** **[0000050863-25-000009_intc-20241228.htm:42]**                                     |
| 2030+    | 34,448 **[0000050863-25-000009_intc-20241228.htm:133]**               | Fixed-rate senior notes, bonds | 2.00-5.90 **[0000050863-25-000009_intc-20241228.htm:132]**    | 68.9% = (34,448 / 50,011) * 100 **[0000050863-25-000009_intc-20241228.htm:133]** **[0000050863-25-000009_intc-20241228.htm:42]**                                   |

f34ec7bd3a4c0d3d0169dd257e961e1543fa301cae6cef4d3b607a503fbad6a9

- **Intel's Intel Foundry Services has gained significant momentum**, with **three committed external customers on its leading-edge Intel 18A process**, including major prepay customers, and expects to secure a fourth by year-end, indicating strong industry confidence in Intel's process leadership and foundry capabilities.  **[INTC_3362209_14]** **[INTC_3362209_9]**
- **Intel's Data Center and AI (DCAI) segment returned to profitability this quarter**, with **record Average Selling Prices (ASPs)** driven by a strong ramp of newer products like **Sapphire Rapids**; the company's road map for future products like **Emerald Rapids, Sierra Forest, and Granite Rapids** is healthy and positions Intel well to regain market share and expand margins in the data center market.  **[INTC_3362209_18]** **[INTC_3362209_17]**
- **The Client Computing Group (CCG) is demonstrating strong health and momentum**, with three consecutive quarters of exceeding expectations, healthy customer inventory levels, and a positive outlook driven by the launch of new products like **Meteor Lake (Core Ultra)** and tailwinds from **Windows 10 end-of-service** and **Microsoft's Copilot launch**, supporting Intel's expectation of a return to a PC TAM of approximately **300 million units**.  **[INTC_3362209_15]**

4f6eb2fed0cef32ee793b9bb2c889a608ea864ff94e446721908186457eb8ef1

bfe8df07fa8005c0250cd3b02399406130611205705a9579ee87611d50329dd6

1. **Gross Margin Outlook**  
   **Q:** Will gross margins improve year-over-year?  
   **A:** Management expects a **60% fall-through** on revenue growth, improving gross margins from last year's **43.6%**. While Q1 starts at **44.5%**, they anticipate margins to improve throughout the year despite quarter-to-quarter volatility. Factors include revenue growth, better factory utilization, achieving leadership in nodes and products, and savings from the internal foundry model, which is expected to deliver **$4–5 billion** in savings.  **[INTC_3370902_12]** **[INTC_3370902_14]** 

2. **Data Center Business Outlook**  
   **Q:** What's the outlook for the data center business in Q1 and beyond?  
   **A:** Excluding FPGA, the data center decline in Q1 is seasonal. Management sees strength from server customers, particularly in enterprise. They expect **year-on-year growth**, with market share stabilizing and momentum building from ramping **Gen 4, Gen 5, Granite Rapids, and Sierra Forest**. They anticipate the AI surge will result in more on-premise AI inferencing, benefiting Intel.  **[INTC_3370902_13]** 

3. **Manufacturing Node Leadership**  
   **Q:** How confident are you in achieving leadership with 18A nodes?  
   **A:** Intel is confident in the progress of **18A**, with **Clearwater Forest** taping out, indicating health of the node. They are ahead on **backside power**, offering substantial gains to customers. While they use external foundries to complement and manage capital, they are focused on maximizing internal capacity as part of their **Smart Capital** strategy.  **[INTC_3370902_10]** **[INTC_3370902_11]** 

4. **AI Market Impact**  
   **Q:** How will AI investments affect your CPU business growth?  
   **A:** While high-end cloud customers focus on AI training with accelerators, Intel expects the market to shift towards AI inferencing, where their products are more substantial. The enterprise market will deploy AI on-premise, leveraging Intel's strengths. They need to participate more in accelerators, with **Gaudi3** gaining excitement. The message for **2024** is "inferencing AI everywhere," areas where Intel has a stronger footprint.  **[INTC_3370902_18]** 

5. **Client Market Outlook**  
   **Q:** What's driving confidence in client market growth?  
   **A:** Intel expects the client market to be a few points larger than last year's **270 million units**, with stable market share and a better product line. Tailwinds like **AIPC** ramping, **Windows 10 EOS**, and strong positions in gaming and commercial segments contribute to confidence. Excitement around AIPC is high, marking the most significant category-defining moment since WiFi's introduction.  **[INTC_3370902_17]** 

6. **Foundry Business Prospects**  
   **Q:** How significant is your foundry business, and what's expected ahead?  
   **A:** The decline in IFS from Q4 to Q1 is due to the natural ending of traditional packaging volume and equipment business fluctuations. Intel is focusing on advanced packaging and has secured four **18A** customers. Lifetime deal value is a key metric, representing external foundry business growth. Internal business will drive factory build-out, and more updates will be provided at the **IFS Direct Connect** event on **February 21**.  **[INTC_3370902_19]** 

7. **Savings from Internal Foundry Model**  
   **Q:** How will the internal foundry model contribute to savings?  
   **A:** The internal foundry model is expected to deliver **$4–5 billion** in savings. Teams are focusing on test times, sample activity, loadings, and capital investments. This new approach is revealing significant savings opportunities and will help drive towards **60%** gross margins.  **[INTC_3370902_12]** 

8. **Sierra Forest and Granite Rapids Mix**  
   **Q:** What is the long-term mix between Sierra Forest and Granite Rapids?  
   **A:** Both products are on **Intel 3**. Sierra Forest targets cloud providers needing high core counts for bulk workloads, focusing on TCO. Granite Rapids offers performance and features. Most enterprise customers are expected to stay with P-core products like Granite Rapids, but there's a steady rise anticipated for Sierra Forest in the cloud segment.  **[INTC_3370902_15]** 

9. **Manufacturing Technology Challenges**  
   **Q:** How are you managing technological challenges in 18A development?  
   **A:** Intel is carefully managing risks by introducing **EUV** with Intel 4 and 3, thereby de-risking it before 18A. They ran an internal node using Intel 3 with backside power to de-risk backside power before 18A, which combines backside power and **gate-all-around** transistors. Backside power on 18A has been yielding well, with focus now on the new transistor structure. **High NA** EUV is not part of 18A, avoiding additional risk. Overall, they are confident in delivering **5 nodes in 4 years**.  **[INTC_3370902_20]** 

aef508888e3f180b1fde586c632597e84b704af972af13e9af1cf29b2f23bd54

- **Intel expects stabilizing market share and year-on-year growth in their Data Center business**, driven by the ramp-up of **Gen 4, Gen 5, Granite Rapids, and Sierra Forest products**, and is well-positioned to benefit from **AI inferencing on-premises**, leveraging its enterprise strength.  **[INTC_3370902_14]**
- **Intel's client business is anticipated to grow**, with stable market share and improved product lines, including the introduction of **AI PCs (AIPCs)**, expected to bring a **multi-year cycle of growth**. The AIPC launch is described as the most exciting category-defining moment since Wi-Fi was introduced.  **[INTC_3370902_17]**
- **Intel's internal foundry model is expected to drive $4–5 billion in savings**, improving gross margins towards the **60% goal**, and aiding in regaining process leadership with the **Intel 18A node**. Customers and IP providers are affirming the competitiveness of their **process technology**, particularly in **backside power** enhancements.  **[INTC_3370902_13]** **[INTC_3370902_11]**

5551712dc7b5eb5a93ba0a7a8c244a9938a7956ce3f365187fb7460c9468dc9f

1. **Gross Margin Outlook**  
   **Q:** What caused Q3 gross margin upside and why is it declining in Q4?  
   **A:** The Q3 gross margin of **41%** was better than expected due to better sell-through of previously reserved inventory, which won't repeat in Q4.  **[INTC_3405233_9]**  In Q4, margins will be pressured by increased start-up costs associated with **18A**, guiding to a **39.5%** gross margin  **[INTC_3405233_9]** , which serves as a clean starting point for 2025 gross margins.  **[INTC_3405233_9]** 

2. **2025 Revenue and Margin Expectations**  
   **Q:** How should we think about 2025 sales growth and gross margins?  
   **A:** They're managing investments to a **3% to 5% growth rate** next year.  **[INTC_3405233_13]**  The **39.5%** gross margin guide for Q4 is a starting point for 2025.  **[INTC_3405233_13]**  They expect more headwinds in the second half due to **Lunar Lake** becoming a meaningful part of volume, which pressures gross margins in 2025.  **[INTC_3405233_13]** 

3. **Foundry Business Revenue Growth**  
   **Q:** How large is external foundry revenue currently, and how will it grow?  
   **A:** External foundry revenue will be a modest portion for the next few years, dominated by internal products.  **[INTC_3405233_15]**  They aim for **$15 billion-plus** in external foundry revenue by the end of the decade.  **[INTC_3405233_15]**  Majority of foundry revenues will come from internal products in the near term.  **[INTC_3405233_15]** 

4. **18A Defect Density and Yields**  
   **Q:** How does 0.4 defect density on 18A translate to yields?  
   **A:** A defect density of less than **0.4** is healthy at this development phase but not yet at high-volume production levels.  **[INTC_3405233_10]**  Defect density needs to be markedly lower for high-volume production planned for the second half of next year.  **[INTC_3405233_10]**  They're on track and see all necessary signs to achieve this.  **[INTC_3405233_10]** 

5. **Impact of Lunar Lake on Margins**  
   **Q:** How much does memory packaging in Lunar Lake affect gross margins?  
   **A:** **Lunar Lake**, with memory in the package, significantly impacts gross margins.  **[INTC_3405233_18]**  Originally expected to be one-third of volume next year, they've increased volume due to the **AIPC** market  **[INTC_3405233_18]** , which puts pressure on gross margins in 2025.  **[INTC_3405233_18]** 

6. **Intel's AI Strategy**  
   **Q:** Without a competitive AI product, is being CPU-centric enough?  
   **A:** The CPU plays an increasing role in data center AI compute.  **[INTC_3405233_14]**  Intel's strategy is **CPU plus accelerator** or **CPU plus Gaudi**.  **[INTC_3405233_14]**  They've seen good early interest in **Gaudi 3**  **[INTC_3405233_14]**  and are focusing on the **x86 ecosystem**, which has significant industry interest.  **[INTC_3405233_14]** 

7. **Recapturing Server CPU Share**  
   **Q:** How do you plan to stabilize or recapture server CPU market share?  
   **A:** The goal is to stabilize position and grow from there.  **[INTC_3405233_16]**  With **Xeon 6**, **Granite Rapids**, and **Sierra Forest** fully shipping, they aim to hold share and then regain it.  **[INTC_3405233_16]**  The AWS deal reinforces Xeon and their customization role.  **[INTC_3405233_16]** 

8. **Capacity Optionality and 18A**  
   **Q:** If 18A gets delayed, what capacity options do you have?  
   **A:** They have optionality in the product portfolio and more resilience in their supply chain than competitors.  **[INTC_3405233_12]**  They value the relationship with **TSMC** and have flexibility to scale up if market conditions require.  **[INTC_3405233_12]** 

9. **CapEx and OpEx Flexibility**  
   **Q:** How much flexibility is there in CapEx and OpEx in '25 and '26?  
   **A:** The **$17.5 billion** for OpEx is a firm plan with little variability.  **[INTC_3405233_19]**  CapEx has flexibility in capacity investments based on demand and cash flow.  **[INTC_3405233_19]**  The goal is to generate free cash flow and adjusted free cash flow next year and onwards.  **[INTC_3405233_19]** 

10. **Panther Lake Production Plans**  
    **Q:** Are most Panther Lake tiles still being outsourced?  
    **A:** Some tiles are external, but over **70%** of the silicon area is back in-house.  **[INTC_3405233_11]**  The majority of Panther Lake wafer capacity is coming back inside.  **[INTC_3405233_11]**  For **Nova Lake**, the large majority is committed to Intel's internal production or foundry.  **[INTC_3405233_11]** 

11. **Demand for Foundry Packaging Services**  
    **Q:** Why aren't we seeing more interest in your packaging services?  
    **A:** They see significant interest, but moving supply chains is complicated and takes time.  **[INTC_3405233_17]**  They've made progress with design wins included in their lifetime deal value and have a strong pipeline of additional designs.  **[INTC_3405233_17]**  Advanced packaging was profitable this quarter.  **[INTC_3405233_17]** 

12. **Narrowing Product Focus**  
    **Q:** What does narrowing product focus and prioritizing x86 mean?  
    **A:** They're simplifying product lines and reducing SKUs to focus on core investments.  **[INTC_3405233_21]**  Actions include consolidating products and leveraging investments to meet the **$17.5 billion** OpEx target while aiming for profitable growth.  **[INTC_3405233_21]** 

13. **IDM 2.0 Model Considerations**  
    **Q:** Does prioritizing x86 change the IDM 2.0 model?  
    **A:** External foundry requires a different management approach, but wafers and cash flows come from internal business.  **[INTC_3405233_22]**  The subsidiary model is key to drive cultural transformation while maintaining a leading-edge foundry model.  **[INTC_3405233_22]** 

14. **"Better Together" Strategy Rationale**  
    **Q:** Explain the rationale for the "Better Together" strategy.  
    **A:** Moving to a subsidiary model for foundry aims for operational integrity and clearer communication with customers.  **[INTC_3405233_20]**  The synergies of co-development and customer relationships are substantial, and the success of the foundry is tied to internal products.  **[INTC_3405233_20]** 

7d1cf285b8b327b5d4eebaee42ba15b7dbe5e0589cd817e0ea87949d0439e687

- **Intel expects sequential revenue growth to be below seasonal in Q3**, with the client business flat to down and modest growth in data center and edge markets, due to weaker spending across consumer and enterprise markets, especially in China, and elevated customer inventory levels.  **[INTC_3395796_7]**
- **Gross margins are projected to decline, with an expected gross margin of approximately 38% in Q3 and an EPS of negative $0.03**, impacted by modest revenue growth, continued ramp of new manufacturing nodes, and a heavier dependence on external wafers, which will pressure gross margins.  **[INTC_3395796_7]**
- **Intel is suspending its dividend at the beginning of the fourth quarter to prioritize liquidity**, indicating potential cash flow challenges and reduced returns for shareholders.  **[INTC_3395796_2]**

2c9a96c1470495c5aaca7a6df571b39a5becd43be398891428da534cebf28bf1

- **Intel has secured $15 billion in lifetime deal value of committed deals** in its Foundry Services, particularly in advanced packaging, and the release of the **Intel 18A PDK 1.0** has accelerated customer engagement.  **[INTC_3395796_22]** **[INTC_3395796_10]**
- The company is implementing significant structural improvements to become both a **world-class foundry and a world-class fabless company**, addressing inefficiencies to enhance profitability and competitiveness in the long term.  **[INTC_3395796_11]** **[INTC_3395796_10]**
- By **bringing manufacturing back in-house starting in 2025-2026**, especially with products like **Panther Lake**, Intel expects to improve its cost structure and gross margins through more competitive processes and reduced outsourcing.  **[INTC_3395796_18]** **[INTC_3395796_13]**

c97523a8653549b6efd5c120dcb6c382936c99f819a26e54477008b4d8152393

- **Weaker than expected demand across cloud, enterprise, and geographies is leading to low revenue growth in the near term.**  **[INTC_3385075_9]**
- **Intel Foundry Services is operating at a loss, with operating losses expected to increase through 2024, and profitability not anticipated until midway between now and 2030.**  **[INTC_3385075_22]**
- **Delays in launching new server products like Granite Rapids, with production release in Q3 2024, and time needed for customer adoption could delay market share gains.**  **[INTC_3385075_15]**

9b436237c8cd1267751efcda0487a271516b79dc623568852317e59d04ed62be

1. **Gross Margin Outlook**  
   **Q:** Can you discuss the gross margin drop in Q2 and outlook?  
   **A:** Gross margins had an upside in Q1 due to better sell-through on previously reserved material, pulling some benefit from Q2 into Q1. The Q2 drop is due to increased startup costs. However, they expect good fall-through in Q3 and Q4, lifting gross margins from current levels. They anticipate better gross margins in 2025 than in 2024, aiming for **mid-50s gross margins by mid-decade and ultimately reaching 60%**. Cost improvements from better decision-making and changes in reserving practices will reduce volatility in gross margins.  **[INTC_3385075_10]** **[INTC_3385075_17]** 

2. **Demand Outlook and H2 Growth**  
   **Q:** What's behind weaker near-term demand and H2 growth confidence?  
   **A:** The market was weaker across cloud, enterprise, and geographies. Despite this, they see strength in H2 driven by unique product positions, **AI PC demand**, a Windows upgrade cycle, and strong interest in **Core Ultra processors**. They're experiencing a strong AI PC outlook and improved competitiveness in data center products. All businesses are expected to grow in the second half, with momentum going into 2025.  **[INTC_3385075_9]** 

3. **Server Roadmap and Market Share**  
   **Q:** How will new server products impact market share?  
   **A:** They are stabilizing and improving competitiveness in the data center with new products like **Sierra Forest** and **Granite Rapids** on Intel 3 process. **ASPs are increasing** due to higher core counts. They expect to regain share as they end the year and move into 2025, with strong products and aggressive ramps with customers.  **[INTC_3385075_13]** **[INTC_3385075_15]** **[INTC_3385075_18]** 

4. **AI Accelerator Revenue and Roadmap**  
   **Q:** Update on Gaudi and Falcon Shores AI accelerators revenue?  
   **A:** They expect **over $500 million in Gaudi revenue** this year, mostly in the second half, indicating strong momentum into 2025. Over 20 customers are embracing **Gaudi 2 and 3**. **Falcon Shores** will build on this momentum, arriving late next year, combining Gaudi 3 performance with full programmability.  **[INTC_3385075_12]** **[INTC_3385075_16]** **[INTC_3385075_24]** 

5. **AI PCs and Supply Constraints**  
   **Q:** How are supply constraints affecting AI PC outlook?  
   **A:** There is strong demand for AI PCs (**Core Ultra processors**), with customers requesting additional supply beyond commitments. Supply constraints are in the back-end wafer-level assembly capacity, which they are working to expand. AI PCs are creating new use cases and an upgrade cycle, leading to higher ASPs and potential TAM expansion. They expect **every PC to become an AI PC over time**.  **[INTC_3385075_19]** 

6. **Foundry Business Operating Loss and Revenue**  
   **Q:** How should we model foundry operating losses and revenue?  
   **A:** Foundry operating losses will increase this year due to startup costs, reaching around **$2.4 billion** in Q2 and remaining at that level throughout the year. Improvement is expected in 2025, aiming to reach breakeven midway between now and 2030. External wafer volumes on **Intel 4 and 3** will become more prominent next year.  **[INTC_3385075_22]** 

7. **Role of CPU in Gen AI Servers**  
   **Q:** Does CPU matter in gen AI servers with accelerators?  
   **A:** Yes, CPUs play an important role, especially in enterprise use cases where data resides in x86 databases. Intel sees opportunities as CPUs handle real-time data, security, networking, and management, integrating with accelerators for AI workloads. They are focusing on unlocking enterprise AI with **Xeon CPUs plus Gaudi accelerators**, enabling new applications like **70-billion-parameter models running natively on Xeon**.  **[INTC_3385075_21]** 

8. **Insourcing of Tiles and Process Leadership**  
   **Q:** Any flexibility to bring back external tiles earlier?  
   **A:** There is limited flexibility since process node decisions are made early in product planning. The peak of external tiles is this year and next, with a significant shift back to Intel factories starting late next year. They expect to insource **a couple of fabs' worth of capacity** by 2026 and beyond, improving wafer ASPs, volume, and margins.  **[INTC_3385075_23]** 

9. **Altera and NEX Business Growth**  
   **Q:** What's driving the expected ramp in Altera and NEX?  
   **A:** **Altera** is expected to exit the year at a **$2 billion run rate**, recovering from inventory digestion and normalizing to end consumption. **NEX** (Network and Edge Group) will grow as it overcomes inventory adjustments, with strength in AI networking products, IPUs, and edge AI as they enter the second half and into 2025.  **[INTC_3385075_20]** 

073840de1ab9f0faccfd4c63520650924cc4cca723347d9b2058975b53483962

- **Intel faces competitive pressures in its Data Center business, having lost market share in Data Center CPUs due to past issues.**  **[INTC_3362209_16]**
- **Export controls targeting high-end AI accelerators may impact Intel's sales in China, potentially affecting growth in AI products like Gaudi.**  **[INTC_3362209_13]**
- **Revenues from Intel's foundry business may not materialize for 2-3 years, limiting immediate impact on financials despite adding new customers.**  **[INTC_3362209_14]**

fdc66f98784c0afa96bae621693e8b3a080961c13de2a97584f1d8e74308175a

Intel Corp (INTC)

Financials