Intel’s financial performance in the third quarter surpassed Wall Street’s forecasts on Thursday, signaling a notable and promising shift for the company after a series of underwhelming results. The stronger-than-expected earnings were driven by a combination of rising revenue, decisive and wide-ranging cost reductions, and a wave of substantial strategic investments executed over the past two months. These efforts form part of CEO Lip-Bu Tan’s ongoing campaign to revitalize the once-dominant semiconductor firm, which in recent years has struggled to reclaim its leadership position amid intensifying global competition.
The company’s latest financial disclosures reveal that Intel’s revenue growth and impressive $4.1 billion in net income represent a distinct departure from its previous trend of quarterly losses. This performance offers a far more optimistic picture of Intel’s fiscal health, hinting at a potential turning point. Yet, the company’s path to recovery is far from simplistic or singular — it is instead a multifaceted story shaped by aggressive cost-cutting measures, including layoffs and targeted operational streamlining, alongside a series of high-impact investments from prominent backers such as SoftBank, Nvidia, and the United States government. Each of these elements plays a critical role in reestablishing investor confidence and shoring up Intel’s strategic foundation.
During its third-quarter earnings presentation on Thursday, Intel announced that it had added a substantial $20 billion to its balance sheet — a surge that immediately sent its stock price soaring. This extraordinary financial boost was primarily the result of three major investments made within a three-month window. In August, SoftBank contributed $2 billion, underscoring institutional confidence in Intel’s revival potential. Shortly thereafter, the U.S. government made a historic move by acquiring a 10% equity stake in Intel — an unprecedented vote of confidence in the nation’s leading semiconductor manufacturer. To date, Intel has received $5.7 billion of the planned $8.9 billion government investment, providing it with significant liquidity for strategic initiatives. A few weeks later, in September, Nvidia expanded this momentum by securing a $5 billion stake in Intel as part of a broader long-term agreement to co-develop advanced semiconductor technologies.
Reflecting on these developments during the company’s earnings call, CEO Lip-Bu Tan said the deliberate steps taken to reinforce the company’s financial position have granted Intel the operational agility it needs to pursue its transformation with renewed confidence. He further expressed deep appreciation for the support shown by President Trump and Secretary Howard Lutnick, describing their backing as evidence of Intel’s ongoing strategic importance as the only U.S.-based semiconductor company capable of integrating leading-edge logic, research and development, and manufacturing under one roof.
In addition to these inflows, Intel received another $5.2 billion in cash proceeds from the sale of its ownership stake in Altera, the hardware design company it had acquired in 2015. The sale, completed on September 12, represents a continuation of Intel’s portfolio optimization strategy. Likewise, the company divested its holdings in Mobileye, the autonomous driving technology firm, further streamlining its assets to refocus capital on its core semiconductor and foundry operations. Combined, these divestitures and investments have dramatically reshaped Intel’s financial outlook.
Financially, Intel’s third-quarter revenue rose by $800 million to reach $13.7 billion, compared to $12.9 billion in the previous period. The company’s $4.1 billion in net income marked a remarkable turnaround from the staggering $16.6 billion loss reported during the same quarter a year ago — a shift that underscores the magnitude of the progress made under Tan’s leadership.
Despite this encouraging quarter, some uncertainty remains around the future of Intel’s foundry business — the division responsible for manufacturing custom chips for external clients. This segment, designed to position Intel as a contract manufacturer rivaling global players like TSMC and Samsung, has struggled to gain traction since its inception. Recognizing its strategic importance, Tan prioritized reorganization efforts earlier this year, including significant staff reductions intended to streamline operations and improve competitiveness. The foundry’s direction has also become a focal point of policy interest for the Trump administration, which attached explicit conditions to the U.S. government’s investment to ensure Intel remains committed to its foundry strategy. The agreement includes provisions that would impose penalties on Intel should it divest from or neglect its foundry business over the next five years.
Market analysts are paying particularly close attention to the foundry’s performance as a barometer of Intel’s long-term growth potential. Experts interviewed by TechCrunch in August contended that Intel’s challenges were not primarily financial but strategic, emphasizing that the company’s recovery would depend on its ability to define and execute a coherent plan for its foundry operations. Tan, addressing these concerns, reaffirmed the company’s conviction that Intel’s foundry unit is uniquely positioned to capitalize on the accelerating global demand for semiconductors. He stressed, however, that building a world-class foundry network is an arduous, multi-year journey rooted in cultivating trust and technological excellence. While he provided few concrete details beyond noting ongoing engagements with potential partners, Tan assured investors that the business’s growth would proceed in a disciplined and deliberate manner.
“Building a world-class foundry is a long-term effort founded on trust,” Tan reiterated, underscoring that success in this field depends on both technical capability and the consistent satisfaction of clients’ diverse needs. He emphasized that Intel’s mission as a foundry partner is to create processes and manufacturing frameworks that can be seamlessly adapted by a wide variety of customers, each developing unique products that require customized support. This means maintaining an intricate balance between flexibility, performance, and cost-efficiency. “We must learn to delight our customers,” Tan stated, “as they depend on us to produce wafers that deliver exceptional results in performance, yield, cost, and scheduling.” His remarks captured both the gravity of the challenge and the depth of Intel’s renewed ambition — positioning the foundry effort not merely as a business unit, but as a cornerstone of Intel’s future identity and its ultimate path back to industry leadership.
Sourse: https://techcrunch.com/2025/10/23/with-an-intel-recovery-underway-all-eyes-turn-to-its-foundry-business/
