Intel Corporation’s turnaround strategy gained traction as the chipmaker raised its 2026 capital expenditure to $20 billion from $18 billion, Chief Financial Officer David Zinsner told the Deutsche Bank 2026 Technology Conference on Wednesday.
The company’s shares have delivered a 259% return over the past year, trading at $87.36 to $87.63, though Zinsner noted valuations remain above internal fair-value estimates. Intel’s market capitalization stands at $459 billion, supported by a $23 billion equity offering completed earlier this year.
Gross margin performance has exceeded prior guidance, with 2024 coming in at the low 40% range compared with the previously planned high 30s. Long-term targets remain unchanged, with margins expected to progress from the mid-40s to the high 40s and eventually surpass 50%. The foundry and ASIC businesses are targeted to begin near 40% gross margins.
Foundry operations continue to weigh on profitability, with operating losses running at approximately $2.5 billion per quarter. Zinsner highlighted that the segment is on track to reach breakeven by the end of 2027, though he cautioned this could slip to the end of 2028 if customer adoption accelerates and scaling challenges persist.
Product roadmaps underscored the company’s strategic focus. The Intel 14A process is slated for risk production in 2027 and high-volume manufacturing in 2028, with a 0.9 process design kit expected by October 2024. Zinsner cited improved defect reduction as a confidence boost, comparing current performance to the 22-nanometer node, one of Intel’s strongest historically.
Advanced packaging technology, including EMIB-T, is positioned to generate multiple billion dollars in annual revenue per customer, with targeted gross margins of 40% and operating margins of 30%. Revenue ramp is expected to begin in the second half of 2027, becoming a run-rate contributor in 2028 and gaining momentum in 2029.
Operational efficiency initiatives included reducing management layers from 12 to six and cutting vice president roles from roughly 450 to 200. Revenue growth over the last twelve months reached 7.5%, aligning with the company’s Rule of 45 framework, which targets a combined revenue growth and operating margin of 45 across business units.
Server unit growth has returned to double-digit expansion through 2024 and 2025, the first such stretch in years. However, client hardware demand remains under pressure from memory pricing, a dynamic Zinsner described as not necessarily detrimental given Intel’s stronger focus on data center supply.
Key manufacturing milestones include doubling output at Intel’s Fab 52 in Ireland in 2025 and expanding substrate investments next year to meet demand. Nova Lake is scheduled for 2025, while Arrow Lake and Panther Lake are positioned as successive product generations.
Intel also plans to host an Analyst Day in 2025, shifting from prior timelines.
