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Intel has reported a Q3 2024 quarterly loss of $16.6 billion, the worst loss of any quarter in the company’s history.
The chip giant attributed the loss to a mix of factors. There were $9.9 billion in charges related to deferred US tax assets, $2.9 billion in “impairment of goodwill” charges tied to units like Mobileye, and $3.1 billion due to impairments and the depreciating value of factory assets like the Intel 7 chip process node. Some Intel 7 manufacturing systems can’t migrate to newer technologies, CEO Pat Gelsinger said during the earnings call.
There were also $2.8 billion in restructuring charges linked to layoffs of 15,000 workers, a simplified product lineup, and other cost-cutting measures.
Intel finance chief David Zinser characterized the loss as reflective of the “important steps” taken in cost reductions and positioning the company for profitability in the long run. Gelsinger cited “momentum” in Intel’s x86 processors as well as “strong interest” from customers for the company’s 18A chip foundry.
While these are generally one-time costs, they still portray a Q3 2024 that’s in sharp contrast with a year earlier, when Intel posted a $300 million profit. There were also revenue drops in key divisions, including the core Client Computing Group that produces regular PC chips (down 7%) and the foundry business (down 8%).
What Next for Intel After Its Record Loss?
Intel launched its first Core Ultra Series 2 chips (the ultraportable-oriented Lunar Lake) during the quarter, although their effect on sales might have been muted as only some manufacturers had laptops ready during the period.
Q4 should be better for the company. Most of the restructuring took place during Q3, and other one-off costs simply won’t play a role.
The company also started Q4 by introducing Core Ultra 200s (Arrow Lake) for enthusiast and gaming desktop PCs. That’s not Intel’s largest market, however, and there are concerns that AMD’s Ryzen 9000 series was still faster even before the October 31st introduction of the Ryzen 7 9800X3D.
Apple’s new wave of Macs, particularly the MacBook Pro M4, also poses a threat in the premium space. Early results suggest it should outperform Core Ultra Series 2, Qualcomm’s Snapdragon X Elite, and possibly AMD’s comparable Ryzen AI 300 laptop processors.
Most of Intel’s hopes revolve around 2025. Its first CPU architecture based on the 18A process, codenamed Panther Lake, is due in the second half of that year. It promises not just better performance, but a more cost-effective design that should help Intel eke more of a profit. The challenge is that AMD, Apple, and Qualcomm aren’t standing still — they’re all likely to have follow-ups ready in 2025 as well.
