Intel CFO Says New Chip Output For Clients Will Be Minimal, Eyes Foundry Breakeven By 2027
Intel's CFO David Zinsner announced that the company's new chip output for external clients will be minimal, with a goal for the foundry to break even by 2027. Intel's stock has dropped over 31% in the past year, struggling against competitors like AMD and Nvidia. The company reported a first-quarter revenue of $12.7 billion, slightly above expectations, but guidance for the second quarter fell short. Analysts have lowered price targets due to concerns over demand and economic uncertainty.
Intel Corp’s INTC volume of processors it plans to produce for external customers using its upcoming manufacturing technology is insignificant, Reuters reported on Tuesday, citing CFO David Zinsner at JP Morgan’s Global Technology, Media and Communications conference.
The chipmaker struggled to progress with its 18A and latest 14A chip manufacturing technologies.
Zinsner told Reuters that the Intel foundry is on track to break even in 2027 and would require external customers to generate low to mid-single digit billions in revenue to accomplish that.
Also Read: Intel Ramps Up New Chip Tech To Take On Taiwan Semiconductor’s Global Lead
Intel stock plunged over 31% in the last 12 months. It failed to capitalize on the shift to artificial intelligence accelerators, similar to Nvidia Corp NVDA and Taiwan Semiconductor Manufacturing Co TSM.
Intel fired its chief Pat Gelsinger in 2024 after his turnaround plan to take on Taiwan Semiconductor failed to impress the board. Intel struggled as rivals Advanced Micro Devices, Inc AMD and Nvidia captured market share in data centers, AI, and GPUs.
Intel reported first-quarter revenue of $12.7 billion, down 11% sequentially and 1% year-on-year, although it beat consensus of $12.2 billion. At the midpoint, the company guided to second-quarter revenue of $11.8 billion, significantly missing the consensus estimate of $12.8 billion.
Wall Street analysts cut their price targets on Intel after its first-quarter results, citing the beat as being driven by “customers purchasing ahead of potential tariffs,” which could impact demand in the second quarter. They also mentioned management concerns over an increasingly uncertain economic landscape.
Price Actions: On Thursday, INTC stock closed at $21.55.
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