Key Points
- Intel is expected to report another significant quarterly loss, marking its fifth consecutive quarter of declining revenue.
- New CEO Lip Bu-Tan is shifting the company’s strategy to a new “14A” chipmaking process.
- This risky strategy shift could result in a massive financial writedown for the company.
- Investors are closely watching the new CEO for his full turnaround plan, which includes selling off assets.
As Intel prepares to report what is expected to be its sixth consecutive quarterly loss, investors are focused on the new CEO, Lip Bu-Tan, and his plan to turn the struggling chipmaker around. The company’s revenue is also expected to drop for the fifth consecutive quarter.
Once the undisputed leader in chips, Intel has fallen behind rivals like Nvidia in the booming AI market and AMD in the PC and server markets. Now, CEO Tan is making a bold and risky move. He is shifting the company’s focus to a next-generation chipmaking process called 14A, a departure from the 18A technology that his predecessor, Pat Gelsinger, had invested billions in.
While the new 14A process is meant to help Intel compete with the world’s top chip factory, TSMC, the switch could force Intel to take a massive financial writedown. This move, which could cost hundreds of millions or even billions of dollars, will be a major point of interest for shareholders.
Since taking over in March, Tan has been streamlining the company by selling off non-core assets, including a large stake in its Altera business. Investors will be watching to see if he announces more asset sales or layoffs.
Like other chip companies, Intel is also dealing with customers who are hesitant to spend due to uncertainty from the U.S. trade war. However, there is one bright spot: revenue from Intel’s data center unit is expected to jump about 20%, signaling some recovery in that key market.
