
Intel didn’t have the best week as the company's stock plunged about 9% following their announcement to slash foundry costs with hopes to revive the more losing business segments within the company. Intel had reported earnings that were better than expectations however the company’s chip manufacturing business was still in the limelight due to to lower than expected foundry revenues. Also, to Intel’s reported earnings of 10 cents per share, with the expectation of only a penny coming in, proved to further boost revenue in sales for the company in the third quarter. Ever since the newly appointed CEO Lip-Bu Tan took over, he also had to deal with a more restructuring of the company. Optimistically he had sent out internal communiques to Intel’s employees, sharing that the new chips in due will have better confirmations. In the recent 8k filings for the company’s SEC, Tan also highlighted the foundry to cease operations in the manufacturing segments. There were other sensational blunders with the new Tan in the position, however they all primarily focused there non foundry inteded segments. Tan did give out the statement the company still has the intents to secure clients for further nodes within there chips for 14A, however those in the foundry there seems like no hope to secure clients in there.Intel’s drop on Friday almost entirely erased its annual rally. The shares contractered 60% in 2024, marking the company’s worst performance on record. This slump coincided with Intel’s struggles to penetrate the AI sector, which is almost entirely dominated by Nvidia, alongside doubts about its foundry bet. The company is scaling back work on a chip facility in Germany, postponing construction on one in Poland, and is cutting production in its Ohio plant. Intel’s foundry business relies on a large customer who makes orders. Barclay’s, who has a hold rating on the stock, suggest that “Management wants external customer commitments to pursue the node, but in the meantime, this adds more uncertainty to product roadmaps and makes customer adoption more unlikely,”. Tan, who took over from Gelsinger as CEO, has expressed in a company memo that the first few months in his new role as CEO have “not been easy” and has seemed to suggest that the layoffs have been problematic. Intel has executed most of the layoff plans which will lead to a reduction of 15% of the total workforce, resulting in 75,000 employees by the year’s end."Tan wrote that the company 'invested too much, too soon – without adequate demand.' He also said, 'in the process, our factory footprint became needlessly fragmented and underutilized.”Now, Intel's net loss has grown to $2.9 billion, or 67 cent a share loss, from $1.61 billion, or 38 cent loss in the previous year. The company also incurred an $800 million impairment charge 'related to excess tools with no identified re-use.'"JPMorgan Chase analysts cannot be too worried, considering they labeled the foundry decision a “positive step,” though they remain cautious Intel’s continued loss of market share.
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