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Title: Intel: New Products Must Deliver 50% Gross Profit To Get the Green
Light

Link: https://hardware.slashdot.org/story/25/06/05/...

Intel has implemented a strict new policy requiring all new projects to
demonstrate at least a 50% gross margin to move forward. CEO Lip-Bu Tan
explained Intel's new risk-averse policy as "something that we probably
should have had before," later clarifying that the number is a figure the
company is aspiring toward internally. Tom's Hardware reports: Tan is
reportedly "laser focused on the fact that we need to get our gross margins
back up above 50%." To accomplish this, Tan is also said to be investigating
and potentially cancelling or changing unprofitable deals with other
companies. Intel's margins have slipped to new lows for the company in recent
months. MacroTrends reports Intel's trailing 12 months gross margin for Q1
2025 was as low as 31.67%. Intel's gross margins had hovered around the 60%
mark for the ten years leading up to the COVID-19 pandemic, falling beneath
50% in Q2 2022 and continuing to steadily fall ever since. Holthaus predicts
a "tug-of-war" to ensue within Intel in the coming months as engineers and
executives reckon with being forced between a rock and a hard place. "We need
to be building products that... fit the right competitive landscape and
requirements of our customers, but also have the right cost structure in
place. It really requires us to do both." [...] Tan is also quoted as wanting
to turn Intel into an "engineering-focused company" again under his
leadership. To reach this, Tan has committed to investing in recruiting and
retaining top talent; "I believe Intel has lost some of this talent over the
years; I want to create a culture of innovation empowerment." Maintaining a
culture of empowering innovation and top talent seems, on its face, at odds
with layoffs and a lock on projects not projected to gross 50% margins, but
Tan seemingly has Intel investors on his side in these pursuits.

Read more of this story at Slashdot.

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