[News] Intel Reportedly Demands 50% Margins for New Products in Profitability Push

Intel’s new CEO, Lip-Bu Tan, has been working to turn the company around. According to Tom’s Hardware, Intel has stopped approving new projects unless they can demonstrate a projected gross margin of at least 50%, based on industry expectations, as stated by Intel Products CEO Michelle Johnston Holthaus.

The report, citing Holthaus, notes that under the new risk-averse policy, any product projected to generate less than a 50% gross margin will not move forward or receive engineering resources. While Intel isn’t projecting 50% margins across all operations, Holthaus emphasizes that it remains an internal goal.

Notably, all of its upcoming roadmap products—including Panther Lake and Nova Lake—are currently expected to meet the 50% gross margin target the company is aiming for, according to the report.

The push for this initiative is reportedly being driven by Tan, who is said to be “laser-focused” on restoring the company’s gross margins to above 50%. To support that effort, Tan is also reportedly reviewing—and potentially canceling or restructuring—unprofitable deals with other companies, the report adds.

Intel’s gross margin fell to 36.9% in Q1 2025, according to the company’s press release. As the report highlights, this marks a sharp decline from the roughly 60% margin Intel maintained for a decade prior to the COVID-19 pandemic.

Workforce Cuts and Strategic Realignment

In addition to the new margin policy, CEO Lip-Bu Tan has also been restructuring Intel’s workforce and leadership. In late April, Bloomberg revealed that Intel reportedly plans to cut over 20% of its workforce to reduce bureaucracy and refocus on engineering. This follows last year’s layoff of 15,000 employees, which brought Intel’s headcount down from 124,800 in 2023 to 108,900 by the end of 2024.

Intel’s 18A Reportedly Attracting Major Tech Customers

Meanwhile, Intel’s 18A process is in risk production and expected to enter volume manufacturing later this year, with major tech firms rumored to be among its customers. According to Tom’s Hardware, earlier industry sources indicate that NVIDIA is exploring 18A for its gaming GPUs. Chosun Biz notes that Microsoft has reportedly signed a large-scale foundry deal with Intel, while discussions with Google are also said to be ongoing.

Read more

• [News] Intel Exec Out Amid Streamlining Push: Data Center and Public Sector Sales Heads Reportedly Exit
• [News] Intel 18A Reportedly Lands Major Deal with Microsoft; Google and NVIDIA Said to Be in Talks

(Photo credit: Intel)