Intel Corporation, the world’s largest semiconductor maker and the bellwether of the semiconductor industry, reported second-quarter earnings on Thursday. The administration recently announced major changes to the state’s infrastructure strategy. Under the new leadership of new CEO Lip Bu Tan, who officially took over on March 12, the company is refocusing its efforts. It will cause the delay or cancellation of numerous important advanced manufacturing projects in order to refocus investments towards what the market wants.
At the close of 2024, Intel had 108,900 employees. This was a drop from the 124,800 workers at the end of fiscal year 2023. This move shows the scaling back of the company and their attempt to cut costs. The latest earnings report marks the first full quarter under Tan’s leadership, setting the stage for a new direction amidst challenging market conditions.
The EV maker revealed during the earnings call that it had long intended to have a second factory up and running by 2025. This timeline was extended to 2030 after a delay made public in late February of this year. Projects in Poland and Germany, which are crucial for Intel’s manufacturing capabilities, have faced delays, raising concerns about the company’s production capacity.
Intel is centralizing its test operations. The company plans to greatly streamline its testing operations in Costa Rica. In parallel, it plans to move production to new facilities in Vietnam and Malaysia. This consolidation will increase efficiency and save taxpayer dollars. Intel continues to adjust to an overcapacity landscape and evolving demand.
Tan called for a reckoning on Intel’s investments in new capacity in recent years.
“Unfortunately, the capacity investment we make over the last several years were well ahead of demand and were unwise and excessive,” – Lip-Bu Tan
While Intel continues to navigate these challenges, Tan doubled down on the company’s resolve to fortify a smarter company.
“We have much work to do in building a clean and streamlined organization, which we have started in earnest, and is remain an area of focus for me during Q3,” – Lip-Bu Tan
In an SEC filing for its fiscal year 2022, Intel revealed the extent of its job cuts. This step better serves transparency about its shifts in operations and upcoming directions. The strategy is to enhance the company’s competitiveness. It intends to make its advanced manufacturing plans more market-oriented and improve consistency with realistic go-to-market strategies.
