'This fight is far from over': Intel’s key business is nowhere near a turnaround

Core Viewpoint - Intel's third quarter financial report showed improvement in earnings and revenue, but the manufacturing segment remains unprofitable, posing long-term risks to the company's stock price [1][2][4]. Financial Performance - Intel reported earnings and revenue for the September quarter that exceeded analyst expectations, indicating a positive shift in its financial position due to significant investments from the US government, SoftBank, and Nvidia [2]. - The stock initially rose by 8% in premarket trading following the report but later reduced gains [3]. Manufacturing Segment Challenges - The manufacturing segment, Intel Foundry Services (IFS), reported a narrowed loss of $2.3 billion on $4.2 billion in revenue for the quarter, an improvement from a $5.8 billion loss in the same period last year [5]. - Analysts predict that IFS's loss will increase to $2.5 billion and revenue will decrease to $4.1 billion in the fourth quarter [5]. Customer Commitment Issues - A significant challenge for IFS has been attracting external customers, with only $8 million of its revenue coming from outside clients [6]. - Intel's latest manufacturing process, 18A, will primarily serve internal products, as the company struggled to attract external chip designers like Nvidia and Broadcom [7]. Future Prospects - IFS aims to attract external customers with its next-generation manufacturing process, 14A, which is deemed crucial for the business's success [7]. - The CEO indicated that additional 14A manufacturing capacity will only be added when there is clear demand from customers [7]. - Despite some positive feedback from potential external customers, analysts believe that the 14A process is still a long way from realization [8].