By How are tariffs and the potential recession affecting Intel’s customers? by purchasing older Intel products rather than its newest chips.
David Zinsner, the chief financial officer of Intel, informed analysts on Thursday that the company sold more Raptor Lake chips than Lunar Lake chips. This suggests that consumers favored the higher-performance Raptor Lake chips, which were introduced in 2023, over the most recent Lunar Lake chips, which were introduced in September of last year.
Zinsner, meanwhile, said that the Trump administration’s inconsistent economic policies make Intel’s future very uncertain. Zinsner stated, “The likelihood of an economic slowdown has increased, with the probability of a recession growing, due to the very fluid trade policies in the U.S. and beyond, as well as regulatory risks.” “This makes it harder to predict our performance for the quarter and year, even though the fundamentals supporting growth that I previously discussed are still in place.”
Because Intel is uncertain about the future of the CHIPS Act, Zinsner also provided a huge range for the company’s spending estimates, ranging from $8 billion to $11 billion.
The preferred Intel CPUs are older, less expensive, and more powerful.
The way Intel’s clients are handling tariffs, however, was unexpected. Instead, they’re just purchasing outdated goods. According to Intel executives, both the production of the Raptor Lake chips and the Intel 7 process, which forms their basis, were subject to limitations. The reason behind this is that consumers are acquiring older Intel CPUs that rival or even outperform Intel’s most recent models.
Customers were favoring “N-1” goods, or the new code for older parts, according to Michelle Johnston Holthaus, who rejoined her position as head of Intel goods after serving as the company’s co-CEO for a time following the resignation of former CEO Pat Gelsinger.
