announced<\/a> its Q3 FY 2025 results, which saw it win $13.7 billion in revenue \u2013 a three point year-over-year jump \u2013 and return to profitability with net income of $4.1 billion, a welcome turnaround from Q2\u2019s $2.9 billion of red ink.<\/p>\nThe news wasn\u2019t all good, because sales of Intel\u2019s datacenter products fell one percent, and its Foundry business shed four percent of revenue.<\/p>\n
Client products led the way with $8.5 billion revenue, up five percent.<\/p>\n
\u201cThe Windows refresh is happening more significantly than I think we expected,\u201d CFO David Zinsner said on the company\u2019s earnings call, and Intel is therefore doing well on the desktop as buyers shell out for new hardware to run Windows 11 now that Microsoft has ended support for Windows 10.<\/p>\n
PCs remain an important market, but all the growth in hardware right now is in AI and Intel has missed the boat there \u2013 rivals Nvidia and AMD have cornered the market for GPUs. Intel\u2019s chipmaking Foundry business is also nowhere in AI, because it can\u2019t match TSMC\u2019s manufacturing prowess and is yet to perfect the 18A process that will bring it closer to its Taiwanese rival.<\/p>\n
On its earnings call, execs said Intel is addressing those issues.<\/p>\n
CEO Lip Bu Tan said Intel \u201cmade tremendous good progress \u2026 on 18A\u201d, and ticked off the key milestone of fully operationalizing Fab 52, the Arizona facility where it will make silicon wafers for chips built using the process.<\/p>\n
But Zinsner cautioned that Intel won\u2019t rush 18A, because it doesn\u2019t want to invest in chipmaking capacity until it has clients, even as it works to satisfy clients that 18A is a safe bet.<\/p>\n
\u201c18A, we still have to ramp this,\u201d he said on the company\u2019s earnings call. \u201cI wouldn’t expect significant capacity increases in the near term. But I think as we said, we are not at peak supply for 18A. In fact, we don’t get there until the end of the decade.\u201d<\/p>\n
Execs didn\u2019t directly address the fact that buyers are not confident in 18A \u2013 only Microsoft has signed up to build chips on the process \u2013 and said Intel is working with customers to give them confidence it should be their foundry of choice. The company is also talking to chip design firms about its next process \u2013 named 14A \u2013 and said that effort is already more mature than 18A was at the same point in its evolution.<\/p>\n
Discussing GPUs, Lip Bu Tan said Intel plans to launch \u201csuccessive generations of inference-optimized GPUs on the annual cadence that features enhanced memory and bandwidth to meet enterprise needs.\u201d<\/p>\n
That\u2019s a nod to the fact that analysts believe the market for hardware to run AI workloads \u2013 which requires inferencing capabilities \u2013 will grow fast and become colossal as more businesses deploy AI-infused applications.<\/p>\n
CFO Zinsner also suggested Intel\u2019s server CPU business, which has been its cash cow for years, will also benefit from the AI boom.<\/p>\n
\u201cIn data center, the accelerating build-out of AI infrastructure is positive for server CPU demand from head nodes, inference, orchestration layers and storage,\u201d he said. \u201cWe are cautiously optimistic that the CPU TAM [total addressable market] will continue to grow in 2026 even as we have work to do to improve our competitive position.\u201d<\/p>\n
\u201cIt is increasingly clear that CPUs play a critical role today, and will going forward within the AI data center as AI usage expands and especially as inference workloads outpace that of training,\u201d the CFO added. \u201cSome data center customers are beginning to ask about longer-term strategic supply agreements to support their business goals due to the rapid expansion of AI infrastructure. This dynamic, combined with the underinvestment in traditional infrastructure over the last couple of years should enable the revenue TAM for server CPUs to comfortably grow going forward.\u201d<\/p>\n
The company warned not all is rosy: It can\u2019t build enough chips on its existing Intel 7 and Intel 10 processes to meet demand and won\u2019t invest to increase capacity. \u201cIn some ways, we’re living off of inventory,\u201d Zinsner said. The company is also struggling to secure some chipmaking supplies.<\/p>\n
But the company has improved its balance sheet, in part by paying down debt, which means it will have the cash needed to invest.<\/p>\n
CEO Tan said Intel is therefore hiring the people it needs to get its chipmaking business into good shape.<\/p>\n
Investors liked what they heard, as Intel\u2019s share price popped in after-hours trading from just over $38 to beyond $41. \u00ae<\/p>\n","protected":false},"excerpt":{"rendered":"Intel has returned to profitability, grown revenue, and suggested demand for AI will ensure its struggling foundry business…\n","protected":false},"author":2,"featured_media":100952,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[220,218,219,61,60,80],"class_list":{"0":"post-100951","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-ie","12":"tag-ireland","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/100951","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=100951"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/100951\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/100952"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=100951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=100951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=100951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}