Intel's "life-or-death" moment: How did Chen Liwu settle his estate and start his self-rescue at the door of the ICU?

Written by: DaiDai, Maitong MSX

Compiled by: Frank, Maitong MSX

2025 will be a true life-or-death year for Intel.

Compared to Nvidia, which is dancing in the center of the AI ​​stage, Intel (INTC.M ) is more like one foot teetering on the edge of the ICU. With the departure of "technology evangelist" Pat Gelsinger at the end of last year, new leader Lip-Bu Tan officially took over this old machine that was carrying a heavy burden.

This latest Q4 financial report has brought a familiar question to the forefront again: Has this century-old chip giant reached its end?

If we only look at the stock price performance after the earnings report is released, the answer may be discouraging. But if we take a longer view, what Intel is experiencing may not be a last gasp, but a critical moment of being pulled out of the ICU and trying to breathe on its own.

Objectively speaking, this Q4 financial report is not only Chen Liwu's first complete report since taking office, but also a comprehensive reckoning of the Kissinger era legacy.

Intel's stock price change in 2025, Source: CNBC / Intel Newsroom

I. Change of Leadership: From Kissinger's "Technological Utopia" to Chen Liwu's "Capital Battlefield"

"Survival is the first necessity of civilization." Before understanding this financial report, we must first understand the narrative shift that Intel is undergoing.

When Pat Gelsinger returned to Intel, he outlined an almost idealistic blueprint: to regain process leadership and rebuild America’s domestic semiconductor manufacturing capabilities through an aggressive plan of “5 process nodes in 5 years.” The logic behind this was simple: as long as the technology is leading, the money will eventually follow.

As a result, large-scale factory construction began to spread across the globe: Ohio in the United States, Germany and Poland in Europe, and capital expenditures expanded rapidly.

But reality quickly delivered a blow: the AI ​​wave swept in, and Nvidia (NVDA.M ) truly took center stage. In the data center sector, Intel's CPUs were no longer the main players, and were even ridiculed as "accessories" for GPUs. Meanwhile, massive capital expenditures devoured cash flow, and its stock price continued to decline, gradually plunging Intel into a predicament of "technologically sound, but financially bleeding."

Therefore, it can be said that Kissinger's departure marked the end of Intel's era of "pursuing technological hegemony regardless of cost," while Chen Liwu's arrival represented a completely different survival logic—as the former CEO of Cadence and a venture capital mogul, he was well-versed in venture capital, especially skilled in "balance sheet magic." Therefore, his logic after taking office was extremely ruthless and clear: "stop losses, then go all-in on the core."

• Surgical layoffs: 15% reduction in global workforce, eliminating bloated middle management;
• Strategic contraction: Suspend expensive overseas factories in Germany and Poland to recoup funds;
• Strategic focus: All resources are fed to only two targets—Arizona Fab 52 and 18A processes;

INTC stock price movement from Q4 2025 to Q1 2026 (Source: Yahoo Finance / TradingView)

This is a typical "stop-loss-contraction-preserve core" strategy. For Chen Liwu, survival is more important than storytelling.

II. Analyzing the financial report: How much substance is there in this "better-than-expected" result?

Returning to the data itself, Intel's Q4 financial report is not entirely without merit.

On the surface, the earnings did exceed market expectations, with EPS returning to positive territory. In particular, the $0.15 profit, although accompanied by layoffs, did pull the profit statement back from the brink of collapse, proving that large-scale cost reduction and efficiency improvement have begun to repair the profit statement. Intel has at least temporarily escaped the danger zone of "continuous bleeding".

AI-assisted table generation

But if you disassemble it further, you'll find that the problem still exists.

First, revenue is still declining year-over-year. With the AI ​​boom expected to fully boost the semiconductor industry by 2025, AMD and Nvidia's data center businesses are growing rapidly, while Intel's overall revenue is still shrinking. This means that the current profit improvement comes more from "savings" than from "earned growth".

Secondly, while the gross margin has rebounded to approximately 38%, this level remains extremely low in Intel's history. Ten years ago, the company's gross margin consistently hovered around 60%, and even in recent years it has mostly remained around 50%. In contrast, TSMC ( TSM.M ) still maintains a gross margin exceeding 50%, and Nvidia's is even higher than 70%.

Gross Margin Comparison of Semiconductor Giants (Data based on Q4 2025 Non-GAAP)

Ultimately, the main reason for this improvement in gross margin is not the return of product pricing power, but rather the dilution of fixed depreciation costs after the increase in capacity utilization. Especially in the server CPU market, Intel still needs to compete head-on with AMD through pricing strategies, and pricing power has not truly returned to its hands.

In other words, this is a financial report that "has successfully stopped the bleeding, but has not yet recovered," much like an "extraordinary performance" after the passing grade has been significantly lowered, which does not fundamentally change the fact that the performance is still failing.

However, it is worth mentioning that the market's biggest concern was Intel's cash flow problem, and from this perspective, the situation has indeed eased: as of Q4, Intel held approximately $37.4 billion in cash and short-term investments; it repaid some of its debt during the quarter; and its operating cash flow for the whole year was approximately $9.7 billion.

At the same time, the company bought itself a valuable window of opportunity by selling part of its Mobileye stake, introducing external capital to Altera, and obtaining subsidies under the U.S. Chip Act. In addition, Nvidia's $5 billion strategic investment in Intel also sent an important signal at the capital level.

Overall, Intel's cash flow crisis has been temporarily resolved, at least enough to support it through the most expensive phase before the mass production of the 18A process.

However, it is important to be wary that this is not "financial security," but rather more like "buying time to prolong life."

III. 18A vs. Panther Lake: The Last Window to Turn the Tide?

From a business structure perspective, Intel is currently in a highly fragmented state.

The PC client business remains the company's cash cow. The PC industry's inventory cycle has basically cleared, and OEM manufacturers have begun to resume restocking, providing Intel with a relatively stable source of cash. However, due to product structure and OEM costs, this segment is unlikely to significantly expand its profit margin in the short term.

After a continuous decline, the data center and AI businesses saw a year-on-year growth of approximately 9% in Q4. This rebound was mainly driven by the improved competitiveness of the Xeon 6 platform and cloud providers replenishing their CPU resources after investing in GPUs. However, from a long-term perspective, Intel's market share in the data center sector has declined significantly from its peak in 2021, and the current situation is more of a "stopping down" than a true reversal.

The real source of pressure remains the foundry business, which suffers quarterly losses of up to several billion dollars, mainly due to high depreciation of advanced process equipment, ramp-up costs of the 18A process, and unrealized revenue from external customers.

Before the 18A process is mass-produced, the foundry is more like a wound that is constantly bleeding. However, optimistically speaking, if financial reports represent the past, then the 18A process will undoubtedly determine the future and is more related to the strategic position of the US semiconductor industry.

To put it bluntly, 18A is not just a process node; it is Intel's only ticket back to the throne.

From a technical perspective, the 18A is not a pipe dream. Its RibbonFET (GAA) architecture allows Intel to catch up with the industry mainstream in transistor structure. The PowerVia rear power supply technology gives it a phased leading advantage in energy efficiency and wiring density. More importantly, the 18A will be used on a large scale for the first time on the Panther Lake consumer platform.

Official data shows that it has significant improvements in performance, gaming performance and battery life, especially the battery life, which means that x86 laptops are for the first time directly approaching or even challenging the Apple Silicon camp in terms of experience.

Meanwhile, Microsoft (MSFT.M ) and Amazon (AMZN.M ) have become anchor customers for the 18A, and Nvidia's strategic investment is also seen by the market as a "geo-insurance endorsement" of Intel's manufacturing capabilities. In addition, it is reported that the yield of the 18A is improving at a rate of 7% per month and has entered a predictable track.

In contrast, TSMC expects to apply similar technology to its A16 process by the end of 2026. This means that Intel's 18A will be in a leading position in power supply technology globally in 2026, which will be extremely attractive to energy-sensitive customers such as Apple, Qualcomm, and AI inference chip manufacturers.

Panther Lake Chip Architecture and 18A Overview (Source: Intel Tech Tour)

CEO Li-Wu Chen also stated in the conference call: "Foundry's losses peaked in 2024 and will begin to narrow in 2025." If this goal is achieved, Intel's overall profits are expected to see explosive growth as losses narrow.

These may not signify a victory, but they at least demonstrate that Intel has not been completely abandoned.

IV. Did Q1 guidance scare the market? Understanding the game beyond the fundamentals.

On the surface, Intel's sharp decline after the earnings release was almost a "textbook" market reaction.

The main reason is that the Q1 2026 guidance was extremely conservative, with revenue falling below consensus expectations and non-GAAP EPS even being pushed down to 0. For short-term funds, this is tantamount to a blatant signal: "Don't expect profit improvement next quarter." In a market accustomed to the "high growth narrative of AI," such guidance will naturally trigger a sell-off.

However, if we only interpret this as a deterioration in fundamentals, we may miss a more important layer of meaning. A more reasonable explanation is that this is a typical "Kitchen Sink" strategy of a new leader: when a new CEO takes office, he usually conducts a "Kitchen Sink" to completely release the negative factors, lower expectations, and pave the way for subsequent surprises.

AI-assisted table generation

From this perspective, the Q1 guidance is more like a strategic conservatism than a signal of operational mismanagement. What is truly noteworthy is a geopolitical undercurrent that is gradually emerging beneath the surface of the financial report.

From an industry perspective, the competitive environment Intel is currently facing is almost hellish:

• AMD ( AMD.M ): The Zen 6 architecture is imminent, and it still enjoys priority in TSMC's most advanced process technology. Its product schedule is stable and its roadmap is clear.
• NVIDIA: Blackwell remains in short supply, continuing to absorb global data center capital expenditures;
• ARM / Qualcomm: The PC market continues to erode x86's territory, while Apple's M series and Qualcomm's X Elite remain a constant threat.

In this context, it is almost impossible for Intel to defeat all its competitors head-on through "business competition" in the short term. This also determines a reality: Intel's valuation logic is quietly shifting from performance-based to "system value".

AMD vs Intel CPU market share forecast (Q2 2025)

And this is the key to understanding Nvidia's $5 billion investment.

On the surface, Nvidia's $5 billion investment in Intel seems almost counterintuitive. After all, one is the undisputed king of global AI chips, while the other continues to bleed money from its foundry business. However, if we step outside the financial statements and look at it from the perspective of supply chain security, this deal appears exceptionally reasonable:

Investing in Intel and supporting its foundry business, especially advanced packaging and U.S. domestic production capacity, is essentially buying a long-term "geopolitical insurance" for itself. This is not about immediately shifting orders away from TSMC, but about preparing a backup system that can be activated in advance.

This is precisely the situation that the White House most welcomes – the two American semiconductor giants forming a kind of "symbiotic structure" to reduce the industry's dependence on single overseas suppliers.

This also means that even in the fiercest business competition, Intel is still regarded as an indispensable infrastructure node.

In conclusion

In summary, this financial report is neither a sign of a full recovery nor a final verdict.

What Intel has truly accomplished is simply to stop telling grand technological utopian narratives and instead return to a more realistic and ruthless path: downsizing, conserving cash, and betting on a single core variable.

The 18A and Panther Lake are like a "qualifying match" for Intel—if it wins, it still has the possibility of repricing; if it loses, this century-old giant will be completely marginalized into a supporting role in the industry.

Ultimately, Intel is no longer the "foolish son of a landlord" who can squander capital at will, but a capital-intensive company that has to carefully manage its finances and is on the verge of collapse.

Whether it can truly leave the wards, the answer lies not in this financial report, but in its execution over the next 12–18 months.