[News] Intel Earnings Call Bombshell: Could Exit Advanced Nodes if 14A Fails, Eyes TSMC Outsourcing Beyond 18A

After shocking the market with mass layoffs in mid-July, Intel delivered another bombshell during its latest earnings call. In a 10-Q filing cited by Reuters, the company warned that without major external foundry customers for its 14A process, it may be forced to abandon next-gen advanced nodes entirely.

As OregonLive pointed out, Intel is dramatically scaling back its chipmaking ambitions—and could exit advanced manufacturing altogether if it can’t secure major external clients within four years.

Notably, in its filing, Intel admits that halting work on 14A and future leading-edge nodes would make its product business increasingly reliant on third-party foundries, particularly TSMC, as Team Blue develops products for nodes beyond Intel 18A and Intel 18A-P.

ASML’s first High-NA EUV customer is confirmed as Intel, which plans to use the tech for its 14A node, according to tweakers. IT Home suggests that Intel will apply High-NA EUV lithography to at least three key layers—a major leap. But as ASML’s Twinscan EXE:5000/5200 tool costs about $380 million each, Intel must be sure both its own products and external clients will adopt the node before making such a heavy bet, the report adds.

Scaling down Chip Manufacturing Business in Europe and U.S.

This is not the only cost-cutting drive for Intel on the chip manufacturing business. The company is consolidating chip packaging from Costa Rica into larger facilities in Vietnam and Malaysia, breaking from its longtime strategy of spreading operations globally for supply-chain resilience, as OregonLive notes.

Additionally, Intel has officially canceled plans for new factories in Germany and Poland, as the company notes in its press release that it “is taking action to optimize its manufacturing footprint and drive greater returns on invested capital.”

Intel is even dialing back its “Made-in-U.S.” plans, once again delaying its long-stalled Ohio factory. While its first Ohio fab is originally slated to open in 2025, then pushed to 2030, the project now has no clear timeline, OregonLive reports.

Layoff Numbers Unveiled

According to Reuters, Intel confirms that it is trimming its workforce by 15% from 96,400 at June’s end and plans to shrink further to 75,000 employees by year’s close. The rest of the reduction—totaling a 22% drop from the end of 2024—will come through attrition and other measures, the report notes.

CFO David Zinsner described the move as a “surgical” strike, targeting about half of middle management layers, as per Reuters.

As noted by Intel, the company stays on track for $17B in non-GAAP spending by 2025, and the moves, including layoffs and attrition, led to $1.9 billion in Q2 restructuring charges, hitting GAAP EPS by $0.45. Currently, the company aims at $18B capex for 2025.

As noted by Reuters, Intel’s Q2 revenue held steady at $12.9 billion, ending four quarters of decline. However, job cuts led to $1.9 billion in restructuring costs, and the company reported an adjusted loss of 10 cents per share.

On the other hand, Intel expects a Q3 loss of 24 cents per share, even as it projects revenue between $12.6 billion and $13.6 billion. Although semiconductors are tariff-exempt, customer spending remains cautious amid global uncertainty, with many accelerating shipments into early 2025, Reuters reports.

Read more

• [News] Intel Earnings Call Preview: 14A Strategy, Foundry Challenges, and More
• [News] Intel Layoffs Escalate: 5,000 U.S. Jobs Reportedly at Risk, Oregon Hit Hardest
• [News] Intel on the Move: Nova Lake Reportedly Tapes Out on TSMC’s 2nm, with 18A Yields Gaining Speed

(Photo credit: Intel)