Core Viewpoint - Intel's latest earnings report exceeded market expectations, but the announcement of significant cuts to its foundry business and warnings about potential suspension led to an over 8% drop in its stock price, nearly erasing its gains for the year [1] Financial Performance - In Q2, Intel reported an adjusted earnings per share of $0.10, significantly higher than the market expectation of $0.01 [1] - Revenue also surpassed analyst estimates, and the company provided an optimistic sales outlook for Q3 [1] - However, the company experienced a net loss of $2.9 billion, translating to a loss of $0.67 per share, worsening from a loss of $1.61 billion (or $0.38 per share) in the same quarter last year [2] Strategic Changes - Intel warned that it may "pause or terminate" its foundry business if it fails to secure customers in the next generation of process technology [1] - The company has not yet secured any major external customer orders and expressed uncertainty about future prospects for its 14A process node [1] - New CEO Pat Gelsinger emphasized a more cautious approach, stating that future advancements in chip manufacturing will be based solely on confirmed customer demand [1] Cost Management - Intel announced plans to terminate certain chip facility projects in Germany and Poland and slow down the construction of a new plant in Ohio [1] - The company is implementing significant cost-cutting measures, including a workforce reduction of approximately 15%, bringing total employees down to 75,000 [2] - Gelsinger acknowledged that the company had previously invested heavily without clear demand, leading to a dispersed capacity layout and underutilization [2] Market Position and Competition - Analysts from Barclays noted that management's strategy to seek external customer commitments before advancing process nodes increases uncertainty in the product roadmap and reduces the likelihood of customer adoption [2] - Despite the negative market reaction, JPMorgan analysts viewed Intel's reassessment of its foundry business as a positive first step, although they cautioned about ongoing market share losses, particularly in the AI chip market dominated by Nvidia [2]