Tariffs Are Impacting Intel in an Unexpected Way
While there are some ways semiconductor giant Intel (NASDAQ: INTC) could benefit from the Trump administration's tariff policies and push to bring manufacturing back to the United States, the company is unlikely to be a trade war winner. Economic uncertainty could push down demand for PCs and lead data center operators to pull back on capital spending, bad news for Intel's core CPU business.Intel's guidance for the second quarter reflects the high level of uncertainty surrounding demand for its products. The company sees revenue coming within a wide range between $11.2 billion and $12.4 billion, down from the $12.7 billion in revenue produced in the first quarter. CFO Davis Zinsner noted in the first-quarter earnings call that the risk of a recession was growing amid the trade turmoil.One surprise that came out of Intel's first-quarter report was a shift in demand in the laptop market to models powered by Intel's older products. In the consumer laptop market, the company is seeing an uptick in demand for Raptor Lake systems and a weakening in demand for Meteor Lake and Lunar Lake systems. Intel's Meteor Lake and Lunar Lake chips are more efficient and enable longer battery lives than their predecessors, but systems built around these chips also have higher price points. Intel noted that OEMs are focusing on lower-priced systems to counter the uncertain economic environment.Continue reading
While there are some ways semiconductor giant Intel (NASDAQ: INTC) could benefit from the Trump administration's tariff policies and push to bring manufacturing back to the United States, the company is unlikely to be a trade war winner. Economic uncertainty could push down demand for PCs and lead data center operators to pull back on capital spending, bad news for Intel's core CPU business.
Intel's guidance for the second quarter reflects the high level of uncertainty surrounding demand for its products. The company sees revenue coming within a wide range between $11.2 billion and $12.4 billion, down from the $12.7 billion in revenue produced in the first quarter. CFO Davis Zinsner noted in the first-quarter earnings call that the risk of a recession was growing amid the trade turmoil.
One surprise that came out of Intel's first-quarter report was a shift in demand in the laptop market to models powered by Intel's older products. In the consumer laptop market, the company is seeing an uptick in demand for Raptor Lake systems and a weakening in demand for Meteor Lake and Lunar Lake systems. Intel's Meteor Lake and Lunar Lake chips are more efficient and enable longer battery lives than their predecessors, but systems built around these chips also have higher price points. Intel noted that OEMs are focusing on lower-priced systems to counter the uncertain economic environment.
