Intel recently reported revenue of $12.8 billion in the second quarter of 2024, marking a 1% decrease year-over-year, alongside a net loss of $1.6 billion. This shift from profit to loss comes after the company posted a net profit of $1.5 billion in the same period last year. Additionally, Intel's gross profit dropped to $4.547 billion. The company's share price plummeted by 20% following its announcement to discontinue dividend payments.

Intel CEO Pat Gelsinger announced a significant cost-cutting measure, aiming to save $10 billion by 2025, which involves cutting about 15,000 jobs, or 15% of the workforce. "This is painful news that I have to share, and I know it will be more painful for you to read it," Gelsinger said. "Today is a challenging day for Intel as we implement some of the most important changes in the company's history."

During its second-quarter earnings call, Intel shared updates on its chip and process technology developments. Production of Intel's first-generation Core Ultra CPU, codenamed Meteor Lake, has faced bottlenecks, yet shipments have exceeded 15 million units, with expectations to reach 40 million by year's end. OEM manufacturers have shown strong demand for Meteor Lake chips, and Intel is working to mitigate the gross margin loss experienced in the early stages.

Next up is Lunar Lake, Intel's second-generation Core Ultra product. Intel reported that Lunar Lake achieved mass production in July and will support over 80 Copilot+ PC models from more than 20 OEM manufacturers, with shipments expected to start this quarter. Intel also confirmed that the Lunar Lake CPU will be launched on September 3, ahead of the IFA 2024 event.

Compared to the previous generation, Lunar Lake reduces power consumption by 50%, enhances graphics performance by 50%, and improves energy efficiency by 40%. Lunar Lake is primarily targeted at lightweight notebooks, while its successor, Arrow Lake, is focused on desktop platforms. Depending on market segmentation, Intel plans to use N3B or 20A process technology for Arrow Lake.

Intel also provided updates on process technology progress. The 18A PDK 1.0 was released last month and is scheduled to enter production by the end of 2024. Additionally, development on the 14A and 10A nodes is ongoing.

Intel emphasized that it has secured committed deals worth $15 billion at the 18A process node, with more deals in the pipeline. Despite current earnings performance being unsatisfactory, Intel continues to push forward with next-generation technology and chip development, aiming to reclaim its status as a "chip giant."

Following Lunar Lake and Arrow Lake, Intel plans to introduce the Panther Lake CPU, utilizing Intel's 18A process technology. Production is scheduled to begin in the first half of 2025, with a launch in the second half of 2025. Panther Lake aims to bring chip manufacturing back to the United States and will use high-performance and cost-competitive processes.

At the Taipei International Computer Show, Intel announced that the Panther Lake CPU is now operational, running Windows and demonstrating "very healthy" performance. These chips will pioneer new technologies such as RibbonFet and PowerVia, along with other advanced packaging methods.

In the data center segment, Intel unveiled its next-generation Xeon E-Core CPU series, Clearwater Forest, which will utilize Foveros Direct and other advanced packaging technologies. Clearwater Forest will be based on the Darkmont Core architecture with up to 288 cores. This series is scheduled for a 2025 launch, following the Sierra Forest chips.

Intel stated that the Clearwater Forest has also been activated and is set for a 2025 release. As Intel's first 18A server product featuring hybrid bonding technology, Clearwater Forest will further strengthen Intel's position in the data center market.

Intel's current state reflects its strategic transformation challenges. The decision to separate the contract manufacturing business from the chip design business aims to better address market competition and industry developments.

This move requires substantial capital investment. In the United States, Intel has heavily invested in contract manufacturing, procuring equipment and constructing production facilities. The goal is to compete with TSMC, although achieving this will take time. Contract manufacturing is essentially a long-term investment, necessitating ongoing capital and R&D support.

Once successful, Intel's contract manufacturing business will create a dual market pattern alongside TSMC. This means Intel could not only produce its own products but also offer contract manufacturing services to other semiconductor design companies. Given the global rise in manufacturing demand, Intel is expected to receive numerous orders in the future.

Breaking TSMC's technological monopoly is crucial for Intel to achieve its strategic objectives. Intel has been vigorously pursuing R&D and innovations in process technology to enhance competitiveness through technological advancements.

From the consumer's perspective, diversified market competition benefits both the industry and its consumers. If Intel were to fail, having only AMD in the consumer market and TSMC in manufacturing would not be ideal. Competition drives continuous innovation, improves product quality, and reduces costs, ultimately delivering more appealing products and services to consumers.

Despite the arduous journey, if Intel can achieve technological breakthroughs and successfully expand its contract manufacturing business, its future development prospects appear promising.