Intel's performance and stock price plummeted, and it has reached a time of "life and death".

01 The Revenue Report

Recently, Intel released its second-quarter 2024 results, showing that the company's revenue was US$12.8 billion, a slight decrease of 1% from the same period last year, and a net loss of US$1.6 billion, which is in stark contrast to the profit of US$1.5 billion a year ago.

Recently, Intel released its second quarter results for 2024, showing that the company's revenue was $12.8 billion, a slight decrease of 1% from the same period last year, and a net loss of $1.6 billion, which was in stark contrast to the profit of $1.5 billion a year ago. Revenue in the third quarter is expected to be lower than previously forecast. Faced with declining performance, Intel announced a series of measures to control costs, including laying off 15% of its employees and stopping dividends to shareholders starting in the fourth quarter.

02 Details of the financial report

The details of the financial report show that Intel's total product revenue in the second quarter was US$11.8 billion, a year-on-year increase of 4%. Among them, the Client Computing Group (CCG) had revenue of US$7.4 billion, an increase of 9%; while the Data Center and Artificial Intelligence Group (DCAI) had revenue of US$3 billion, a decrease of 3%; and the Network and Edge Group (NEX) had revenue of US$1.3 billion, a decrease of 1%.

The foundry business had revenue of US$4.3 billion, an increase of 4%; Altera's revenue was US$361 million, a sharp drop of 57%; Mobileye's revenue was US$440 million, a decrease of 3%.

Although Intel has seen an increase in shipments of AI PCs, which have exceeded 15 million units since December 2023 and are expected to reach 40 million units by the end of the year, Intel CEO Pat Gelsinger pointed out that the high cost and low profit margins of AI products have limited the company's earnings.

03 The future expectations

Looking ahead to the performance in the second half of 2024, Kissinger believes it is "tougher than previously expected." Intel expects revenue in the third quarter to be between $12.5 billion and $13.5 billion.

To meet the challenges, Intel plans to reduce costs both externally and internally.

External measures include suspending dividends, while internal measures involve reducing operating expenses, including plans to implement large-scale layoffs, with more than 15% of employees expected to be affected. The goal is to reduce non-GAAP research and development, marketing, general and administrative expenses to approximately $20 billion in 2024 and further reduce them to approximately $17.5 billion in 2025.

Intel also plans to reduce capital expenditures, with total capital expenditures expected to be controlled between $25 billion and $27 billion in 2024, and net capital expenditures to remain between $11 billion and $13 billion. These measures are designed to help Intel weather the current financial difficulties and adjust its business strategy to adapt to future market changes.

In addition, Intel recognizes that to maintain its leading position in technology, it must continue to invest in process technology and manufacturing capabilities. Therefore, savings from cost cutting will be redeployed into these key areas to ensure the company is well positioned to compete in the future.

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