Intel Faces Tumultuous Turnaround amid Foundry Fears

Intel's stocks dropped by 8% following a forecast of higher-than-anticipated quarterly losses and potential withdrawal from the foundry business. New CEO Lip-Bu Tan suggests strategic shifts, stressing the need for demand-backed investment. Intel struggles to regain footing against competitors Nvidia and AMD.

Intel faced a steep 8% decline in its shares during early trading on Friday, spurred by the company's forecast of greater-than-expected quarterly losses. The chipmaker also hinted at the possibility of exiting its foundry business, despite strategic plans laid by the new CEO, Lip-Bu Tan.

In a shift from predecessor Pat Gelsinger's core strategy, Tan highlighted that without investments supported by demand, Intel's withdrawal from the foundry sector could jeopardize $100 billion in assets and increase reliance on TSMC. He mentioned plans to reserve the advanced 18A manufacturing for internal products, with 14A development contingent on securing significant external partnerships.

Once a dominant player in American chip manufacturing, Intel's strategic errors have allowed rivals Nvidia and AMD to outperform it significantly. CEO Lip-Bu Tan, since taking charge in March, aims to recover lost ground by divesting non-essential units and reducing workforce to enhance financial discipline.

(With inputs from agencies.)