Intel Corporation Q2 FY2025 earnings call

• Organization and Culture: Completed review of organizations, reduced management layers by ~50%, on track for return-to-office mandate starting September.
• Foundry Strategy: Focus on Intel 18A progress, discontinuing manufacturing projects in Germany and Poland, consolidating assembly and test operations, Intel 14A development with customer input.
• Core x86 Franchise: Aim to deliver Panther Lake SKU by year-end, progress on Nova Lake, addressing multi-threading issues, new leadership in data center, personal review of chip designs before tape-out.
• AI: Focus on system and software stack, concentrating on inference and agentic AI, incubating skills, working towards full stack AI solution.

Intel Products revenue was $11.8 billion, up slightly sequentially. CCG revenue was up 3% quarter-over-quarter. DCAI revenue was down 5% sequentially. Intel Foundry delivered revenue of $4.4 billion, down 5% sequentially. All Other revenue came in at $1.1 billion and was up 12% sequentially. Intel Products operating profit was $2.7 billion, 23% of revenue and down $250 million quarter-over-quarter. Intel Foundry operating loss in Q2 was $3.2 billion, down $848 million sequentially. All Other delivered $69 million of operating profit.

• Q3 revenue forecast: $12.6 billion to $13.6 billion, down 2% to up 6% sequentially.
• 2025 OpEx target: $17 billion; 2026 OpEx target: $16 billion.
• CapEx: 2025 gross capital investment ~$18 billion, net CapEx $8 billion to $11 billion; expect lower CapEx in 2026.

• Tariff uncertainty impacting revenue quantification.
• Foundry execution risks related to capacity investment and customer trust.
• Gross margin fluctuations due to factors like Lunar Lake and Panther Lake ramps.

Q: CapEx and SCIP fabs?

A: David Zinsner said SCIP fabs' impact on CapEx is roughly as forecasted, with higher normalized run rates in 2027 and beyond.