Quick Briefing

  • Intel Corp. reported second-quarter revenue of$16.1 billion, up 25% year-over-year, marking its strongest growth in over 15 years. CEO Lip-Bu Tan made these remarks during Thursday's earnings call.
  • Growth was primarily driven by data center and AI customer products, with that business revenue surging to $6.3 billion, up 59% year-over-year. Meanwhile, its foundry division and the Client Computing and Physical AI Products Group also achieved double-digit revenue growth.
  • Tan noted that strong demand continues tooutpace Intel's growing supply capacity. In the quarter ending June 27, the company raised its 2026 capital expenditure forecast to over $20 billion, up from the previous range of $17 billion to $18 billion, to sustain investment in advanced manufacturing and packaging.

In-Depth Analysis

As companies accelerate AI infrastructure buildouts, silicon wafers, memory chips, and substrate materials used in smartphones, laptops, data center servers, and other devices are facing severe shortages. This supply-demand imbalance is driving up material prices and posing challenges for industry players.

Tan also stated that surging demand "creates significant opportunities for Intel's foundry and product divisions." He believes that as AI evolves from training and inference to agentic and multi-agent systems, Intel is well-positioned to benefit from its x86 processors, advanced packaging technology, and foundry network.

To meet demand, Intel plans to continue increasing investment through 2027, with the "vast majority" directed toward its U.S.-based network, CFO David Zinsner revealed on the call. Investment priorities include rapidly expanding cleanroom space, placing equipment orders with suppliers, and securing substrate and memory material supplies.

"I am confident in leveraging our extensive IP portfolio to address our customers' most pressing needs," Zinsner said.

Tan also highlighted progress in foundry operations since joining Intel in March 2025, including yield improvements and cycle time reductions across process nodes such as Intel 7, 3, and 18A.

During the quarter, Intel 18A chip yields "improved significantly," and the company began volume production of new products including Panther Lake and Wildcat Lake—the former targeting mobile devices and the latter for value laptops. The company also initiated18A-Ptrial production, an enhanced version of 18A.

Additionally, Tan stated that the next-generation process nodeIntel 14Ahas gained "increasing attention" from customers. The company plans to begin trial production of internal products in the second half of 2027, targeting high-volume manufacturing in 2028.

Intel recently renamed its PC business to "Client Computing and Physical AI Products Group" to focus on AI growth opportunities, appointing Alex Katouzian to lead the division.

The company also appointed Pushkar Ranade as Chief Technology Officer, Seok-Hee Lee to lead advanced packaging operations, and Aparna Bawa to oversee global legal, ethics, compliance, human resources, and organizational functions.

Looking ahead, Intel expects third-quarter revenue to range between $15.8 billion and $16.8 billion. Zinsner indicated that supply remains tight, with near-term growth more pronounced in late Q3 and Q4. He also anticipates "below-seasonal" performance for PC products in the second half, while server processor demand is expected to continue improving through 2028.