Intel (INTC) Q2 2025 Earnings Call Transcript

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Management stated that prior capacity expansion was excessive relative to actual demand, prompting a major strategic shift toward customer-committed, milestone-driven investments and tighter CapEx discipline. Executives disclosed that foundry operations will not invest further without "volume commitments" and explicit customer milestones, as part of a new financial discipline to align capital expenditures with market demand. Operating margin and free cash flow remain pressured by restructuring, impairments, and high CapEx, prompting continued asset sales and cost-reduction measures, including workforce downsizing and management restructuring. The leadership team detailed initiatives for product development simplification, stricter oversight of design approvals, and disciplined architectural choices, as well as a shift to a software-led AI strategy targeting addressable segments like inference and agentic AI. Management made clear that foundry profitability at the Intel 14A node requires "meaningful external customers" and that CapEx funding for such expansion will only follow binding commitments.

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