Intel Faces Challenges in 2024 Amid Mixed Q4 Results and Foundry Losses
Intel’s 4Q24 Financials: A Mixed Bag Amid Struggling Foundry Business
Intel (NASDAQ: INTC) may be showing signs of recovery after a tough 2024, but the company is far from out of the woods. The tech giant posted a net loss of $0.1 billion on revenue of $14.3 billion for 4Q24, surpassing some analysts’ expectations. While these results mark a slight improvement from the prior quarter, they still indicate ongoing challenges for Intel as it seeks to recover from a difficult year. The company’s revenue for 4Q24 was up sequentially from $13.3 billion but was down 7% year-over-year.
Despite the improved revenue, Intel’s gross margin took a significant hit, falling by 6.5 percentage points to 39.2%, reflecting the ongoing difficulties in maintaining profitability. The overall results for 2024 were similarly bleak, with Intel posting a loss of $18.8 billion on $53.1 billion in sales, a 2% decline from 2023. This loss includes a substantial $16.6 billion in restructuring charges from the 3Q24, exacerbating the company’s financial troubles.
Intel Foundry Division Struggles to Gain Traction
While Intel’s client computing group and datacenter/AI divisions showed modest growth in 2024, the company’s Intel Foundry business continues to falter. The Intel Foundry division posted $4.5 billion in revenue for 4Q24, a marginal improvement over the prior quarter but a 13% drop from the previous year. For the year, Intel Foundry’s revenue totaled $17.5 billion, marking a 7% decline compared to 2023. Intel’s efforts to expand its foundry business have not yet yielded the desired results, which is a significant concern for the company’s long-term strategy.
In the meantime, Intel’s 18A manufacturing process, expected to come to market in the second half of 2025, remains a key area of focus for the company. Intel is betting that its ability to deliver successful products with this new technology will turn the tide for its foundry business and help the company compete with Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung in the growing semiconductor market.
Executive Turmoil and Uncertainty Looms for Intel
Adding to the uncertainty surrounding Intel is the ongoing executive search for a permanent CEO. Following the ousting of Pat Gelsinger in December 2024, Intel has been operating under the leadership of co-interim CEOs Michelle Johnston Holthaus and David Zinsner. Intel’s leadership crisis adds another layer of complexity to an already challenging environment, leaving investors and analysts questioning the company’s direction moving forward.
Intel’s Q1 Outlook and 2025 Forecasts
Looking ahead to Q1 2025, Intel has forecast revenue between $11.7 billion and $12.7 billion, representing a 3.9% decline at the midpoint compared to the same period in 2024. Intel’s management warned that macro uncertainties, inventory digestion, and competitive dynamics would weigh on its near-term performance. The outlook reflects continued pressure from both seasonal weakness and intensifying competition in the semiconductor space.
Intel’s Struggle for Relevance in a Competitive Market
Despite Intel’s efforts to execute a cost reduction plan aimed at improving the company’s financial trajectory, the company remains under significant pressure. Intel’s continued losses, particularly in the Intel Foundry division, highlight the challenges it faces in the fiercely competitive semiconductor market. Companies like Nvidia and Advanced Micro Devices (AMD) continue to outpace Intel, particularly in areas like AI chips and data center solutions.
As Intel works to address its challenges, it remains to be seen whether it can execute a successful turnaround. While its recent quarterly results offer some hope, the company faces numerous obstacles, including its struggling foundry business, executive turmoil, and fierce competition from industry leaders.
Intel’s future hinges on its ability to adapt to an evolving market and deliver products that can once again compete on the global stage. Investors will be closely watching how Intel navigates these challenges in 2025 and beyond.
