San Francisco (United States) (AFP) – Intel on Thursday posted quarterly revenue that topped market expectations, saying it has cut about 15 percent of its workforce to be “more agile.” The US chip maker also stated it “will no longer move forward” with projects in Germany and Poland as part of a push to save billions of dollars. The struggling chip maker’s earnings report came as rivals specializing in graphics processing units (GPUs) for artificial intelligence thrive due to rapid adoption of the technology.
Intel is one of Silicon Valley’s most iconic companies, but its fortunes have been dwarfed by Asian powerhouses TSMC and Samsung, which dominate the made-to-order semiconductor business. The company was also caught by surprise with the emergence of Nvidia as the world’s preeminent AI chip provider. Intel’s niche has been in chips used in traditional computing processes, steadily being eclipsed by the AI revolution.
Intel reported $12.9 billion in sales in the recently ended quarter, topping forecasts, but logged a $2.9 billion loss that included $1.9 billion in restructuring charges. “Intel has completed the majority of the planned headcount actions it announced last quarter to reduce its core workforce by approximately 15 percent,” the company said in an earnings release. “These changes are designed to create a faster-moving, flatter and more agile organization.”
Intel shares were down slightly in after-hours trades that followed the release of the earnings figures. Intel chief executive Lip-Bu Tan took the helm in March, announcing layoffs as White House tariffs and export restrictions muddied the market. Malaysia-born tech industry veteran Tan has said it “won’t be easy” to overcome challenges faced by the company.
Meanwhile, South Korean chip giant SK hynix reported record quarterly profits Thursday thanks to soaring demand for artificial intelligence technology. The world’s second-largest memory chip maker dominates the market for high-bandwidth memory semiconductors and is a key supplier for US titan Nvidia. Riding the AI wave, last week Taiwan chip giant TSMC announced a surge in net profit for the second quarter.
“Nvidia suppliers like SK hynix will continue to enjoy strong demand in the coming months and years for memory chips due to the high memory content needed to make AI chips functional,” G. Dan Hutcheson of TechInsights told AFP. Dutch tech giant ASML last week said it booked higher net profits in the second quarter of 2025 compared with the same period last year. The firm, which makes cutting-edge machines for the manufacture of semiconductors, warned that the growth outlook for next year was somewhat less rosy than before.
“Looking at 2026, we see that our AI customers’ fundamentals remain strong,” said Chief Executive Officer Christophe Fouquet in a statement. “At the same time, we continue to see increasing uncertainty driven by macro-economic and geopolitical developments,” he cautioned. Washington has sought to curb exports of state-of-the-art chips to China, concerned that they could be used to advance Beijing’s military systems and otherwise undermine American dominance in AI.
© 2024 AFP
