Intel is a major company in the world of semiconductors, but even colossuses can catch a cold... if only to avoid pneumonia all the same.
A few months ago, Intel published its financial results for the second quarter of its 2024 financial year. A real thunderclap, this publication confirmed what all analysts were more or less frankly saying: Intel was in a bad way. At the time, the company had decided to implement a major restructuring plan, cutting 15,000 of its employees worldwide. Never before had so many Intel employees been let go at the same time... well, at the same time, so to speak: the plan involved departures over several months. At the same time, a number of measures were taken to ease the pressure at all levels.
Intel's financial results for the third quarter of 2024 © Intel
Unfortunately, these various measures were not enough to halt the downward spiral in which the Group finds itself. In fact, the redundancy plan has a lot to do with the even worse results Intel has just published to close its third fiscal quarter 2024. This time, we're talking about losses of $16.6 billion, while at the same time we're only talking about revenues of $13.3 billion. If they are partly to blame for these abysmal losses, it's because these 15,000 redundancies aren't free for Intel: they're compensation payments. This is not the only reason, however, and the Group's production division - Intel Foundry - alone accounts for 5.8 billion of these losses. This is a division that has been struggling for years, and the dual Lunar Lake/Arrow Lake launch hasn't helped... and with good reason: the Group's two latest architectures are almost entirely manufactured by TSMC, not Intel Foundry!
Intel was also forced to admit that its gross margin had also collapsed to just 15%, the lowest level ever recorded by Intel, which can nevertheless point to sales in line with expectations and even close to the maximum expected at $13.3 billion, against a target of $12.5 to $13.5 billion. What's more, Intel is seeking to show that the worst may be behind it, by pointing out that these same sales should increase over the next quarter (to between $13.3 and $14.3 billion), with gross profit climbing to 36.5%. That's all the bad news we wish for the American group.
