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The Intel headquarters in Santa Clara, California, is poised for significant developments as the company prepares to announce its earnings on April 24, 2025.
In a recent earnings call, Intel’s Chief Financial Officer, David Zinsner, expressed concerns regarding the economic backdrop influenced by President Donald Trump’s tariffs and retaliatory measures imposed by other nations. He indicated that these fluid trade policies have amplified the risk of a potential recession. “The ongoing uncertainty in trade, along with various regulatory risks, has indeed heightened the chances of an economic downturn,” Zinsner noted.
Despite these challenges, Intel reported first-quarter results that surpassed analysts’ expectations, thanks in part to customers stockpiling chips in anticipation of forthcoming tariffs. However, the company’s projections for revenue and profit fell short of market expectations, which led to a decline of more than 5% in its stock during extended trading hours.
Intel is forecasting revenue for the current quarter to be between $11.2 billion and $12.4 billion. Zinsner remarked that this range is “wider than normal” due to the uncertainties associated with tariffs and trade regulations.
This situation highlights the vulnerability of manufacturers to trade barriers, even for companies like Intel that are committed to domestic production. While the company does manufacture some advanced processors in the United States, it partners with firms such as Taiwan Semiconductor Manufacturing Company and Samsung in South Korea to produce chips, and imports critical equipment from ASML in Europe. Furthermore, Intel relies on various components that originate from China.
Notably, Zinsner pointed out that the unpredictability stemming from the current tariff landscape complicates Intel’s ability to forecast its quarterly and annual performance. He suggested that the overall market for Intel’s chips could potentially face a contraction, particularly if consumer demand for new computers wanes.
“The primary risk we perceive is a reduction in investment and spending, as consumers and businesses adapt to increased costs and an unpredictable economic environment,” Zinsner stated.
Although the company has diversified its production capabilities worldwide to mitigate some effects of the tariffs, Zinsner acknowledged that Intel would inevitably face rising costs. He indicated that one possible outcome could be a shift toward older-generation chips, which are typically more affordable, as consumers look to manage their spending.
Michelle Johnston Holthaus, CEO of Intel Products, echoed these sentiments, emphasizing that the prevailing macroeconomic concerns and tariffs have prompted companies to adopt a more cautious stance in managing their inventories.
In addition to tariff-related challenges, Intel is contending with new U.S. government measures aimed at regulating the export of advanced artificial intelligence chips to countries like China. This adds yet another layer of complexity to the company’s operations and strategy.
Thursday’s earnings report marked the first for Intel under the leadership of its new CEO, Lip-Bu Tan, who took the helm just last month. Tan has indicated his intent to streamline Intel’s operations and reduce capital expenditures to enhance efficiency in the company’s operations.
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