Intel´s latest Artificial Intelligence-oriented laptop processors, including ´Lunar Lake´ and ´Meteor Lake,´ have struggled with slow market adoption. This lackluster reception has prompted device manufacturers to shift demand back to previous-generation ´Raptor Lake´ chips. Consequently, Intel´s 7-nanometer manufacturing lines, originally intended to ramp up production of the new AI-ready processors and transition to cutting-edge nodes, are now largely committed to fulfilling ´Raptor Lake´ orders, constraining availability across both legacy and next-generation products.
In its first-quarter 2025 financial disclosure, Intel reported essentially flat revenue year-over-year and recorded a net loss, falling short of industry expectations. The company’s stock price dropped by over 5% in after-hours trading, reflecting market disappointment. Management pointed to heightened caution among device makers, who are managing inventories due to ongoing US-China tariff negotiations, and noted that consumers remain hesitant to pay a premium for Artificial Intelligence features that have yet to gain widespread traction in mainstream laptop usage.
To address the underwhelming results and market challenges, CEO Lip-Bu Tan outlined cost-cutting measures, including significant reductions in operating and capital expenditures planned for 2025. The company also confirmed impending workforce reductions in the coming quarter, although specific details were not provided. Looking ahead, Intel plans to lean on its data-center segment, where Xeon processor demand remains strong, and is preparing for the late-2025 debut of its next-generation ´Panther Lake´ platform. Additionally, Intel aims to accelerate software development for on-device Artificial Intelligence applications to stimulate adoption of its AI-enabled hardware portfolio.
