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Intel chief executive Lip-Bu Tan pushed ahead with his sweeping overhaul of the struggling chipmaker on Thursday, dropping major manufacturing projects in Europe as he continues big lay-offs.

The US chipmaker reported better than expected revenue and guidance but still suffered a loss of $2.9bn in the second quarter, which it blamed on one-off costs from the turnaround plan.

In a memo to staff, the chief executive said the company was abandoning manufacturing projects in Germany and Poland, which had been paused in September, as well as slowing construction in Ohio to address losses in its chip manufacturing business.

Tan, who took the helm at Intel in March after the board ousted his predecessor Pat Gelsinger in December, told staff the past few months “have not been easy” as he has pushed ahead with reducing the company’s workforce by 15 per cent.

Second-quarter revenue was flat from a year earlier at $12.9bn, well above Wall Street expectations of $11.9bn.

The Santa Clara, California-based company also gave a better than expected revenue forecast of between $12.6bn and $13.6bn for the third quarter, compared with analysts estimates of $12.6bn.

Chief financial officer David Zinsner said the revenue boost was likely due partly to customers pulling forward orders in the uncertain US tariff environment, although he said it was “difficult to quantify.”

The company reported a $0.67 loss per share, as its net income dropped 81 per cent from the year before.

Tan has said he wants to spur “cultural change”, promising to slash the bureaucracy and middle management that have constrained the ability of the once-dominant semiconductor company to innovate.

But he has held off on more drastic measures, such as a potential sale of Intel’s chip manufacturing business, which has incurred billions of dollars in losses as it struggles to compete with Taiwan’s TSMC.

In the memo, Tan said Intel would take a “fundamentally different approach” to its foundry business, which had been “needlessly fragmented and underutilised”.

John Pitzer, vice-president of investor relations, said the rollback of overseas manufacturing meant the company was “focusing more of our capex spending in the US”, with the group “fully aligned” with President Donald Trump’s agenda to rebuild American manufacturing.

He added that Intel was on track to complete its restructuring plans by the end of the year.

Intel is trying to establish itself as a chip manufacturer to rival TSMC while pushing beyond its mainstay processors for laptops to compete with market leader Nvidia to design artificial intelligence chips.

Its status as a potential US chipmaking champion, reducing reliance on Taiwan-based manufacturers, saw it become one of the largest beneficiaries of a Biden-era federal grant programme.

Intel said it was on track to roll out high-volume production using its new manufacturing technology, known as 18A, this year — which is seen as a bellwether of its ability to remain competitive in leading-edge chipmaking.

But in a filing with the US Securities and Exchange Commission on Thursday, the company warned it might be forced to abandon development of its next-generation manufacturing technology, known as 14A, if it was unable to secure a “significant external customer”.

“I will only invest when I am confident those returns exist,” Tan said on a call with analysts.

The stock dropped 4.6 per cent in after-hours trading on Thursday, after closing 3.7 per cent lower.

Intel shares are up about 13 per cent since the start of the year — partly thanks to it installing a new chief executive — but are still down nearly 30 per cent in the past 12 months after big losses in 2024.