Intel at JPMorgan Conference: Strategic Focus Under New Leadership

On Tuesday, 13 May 2025, Intel Corporation (NASDAQ:INTC) participated in the 53rd Annual JPMorgan Global Technology, Media and Communications Conference. During the event, Intel’s CFO, Dave Zinsner, discussed the company’s strategic direction under its new CEO, Lip Bu Tan. The conversation highlighted Intel’s focus on execution and customer engagement, while also addressing both opportunities and challenges in technology leadership and foundry services.

Key Takeaways

• Intel’s new CEO, Lip Bu Tan, aims to flatten the organization and empower employees.
• The company is focusing on returning to leading-edge process technologies, with 18A and 14A processes being pivotal.
• Intel plans to break even in its foundry business by 2027, targeting revenue from external sources.
• Product development emphasizes meeting customer needs, with a shift towards releasing products on an "A stepping".
• Financial strategies include reducing OpEx and CapEx, with a focus on improving cash flow.

Financial Results

• Intel set a 2024 OpEx target of $17 billion and a 2025 target of $16 billion.
• Net CapEx outlay is reduced by $2 billion, now at $18 billion.
• The foundry business aims for a breakeven by 2027, with revenue from external sources.
• Intel sold 51% of Ultera to help deleverage its balance sheet.
• Lunar Lake margins are affected by memory in packaging architecture, but Panther Lake is expected to improve margins.

Operational Updates

• Lip Bu Tan has flattened Intel’s organizational structure to enhance transparency and speed in decision-making.
• Intel mandates a return to office to improve execution on roadmaps and processes.
• Increased engineer involvement in customer interactions aims to better address customer needs.

Future Outlook

• Intel’s 18A process is expected to ramp with the first SKU, Panther Lake, by the end of the year.
• The 14A process is being developed as a foundry node from the ground up.
• The company is focusing on securing more external volume for the 14A process.
• Cash flow improvements are anticipated through capital spending and operational expense efficiencies.

Q&A Highlights

• Lip Bu Tan’s leadership is focused on execution and eliminating bureaucracy.
• Intel’s foundry strategy includes developing processes with customer needs in mind and addressing IP protection concerns.
• Product development is shifting left to release products on an "A stepping", with efforts to attract top talent.

For a more in-depth understanding, readers are encouraged to refer to the full transcript.

Full transcript - 53rd Annual JPMorgan Global Technology, Media and Communications Conference:

Harlan Sur, Semiconductor and Semiconductor Capital Equipment Analyst, JPMorgan: Okay. Good morning and again welcome to the first day of JPMorgan’s fifty third Annual Technology Media and Communications Conference. My name is Harlan Sur.

I’m the semiconductor and semiconductor capital equipment analyst for the firm. Very pleased to have Dave Zinsner, Vice President and Chief Financial Officer of Intel here with us today. Dave, thanks for joining us this morning.

Dave Zinsner, Vice President and Chief Financial Officer, Intel: Thank you for having me.

Harlan Sur, Semiconductor and Semiconductor Capital Equipment Analyst, JPMorgan: Yeah. I think a good place for us to to start off with is with Lip Bu. Lip Bu Tan, Intel’s relatively new CEO has been in place now for about sixty days. Prior to that, he was a board member at Intel for two years. Obviously, widely respected in the industry as a successful venture investor, spearheaded the turnaround at Cadence Design as CEO for twelve years.

Dave, you know as interim CEO prior to Lip Bu joining and CFO for the past three and a half years, you’ve obviously been working very closely with Lip Bu. From an outsider looking in though, it does appear that Lip Bu is not making any massive changes to the strategic direction, product or manufacturing roadmaps that were in place before he joined. Right? He acknowledges Intel’s historical profile as a technology and compute powerhouse and wants to from my perspective, number one, return Intel to that leadership position in core compute with best in class client and server products. Number two, expand the leadership in compute to take advantage of the rise in AI compute workloads.

And three, from a manufacturing perspective, we turn Intel to a leadership position in advanced leading edge manufacturing, but then leverage that, right, to grow world class foundry business. Is that a fair assessment of the strategy so far? And to his first sixty days, I know you’ve been working closely with him, what are the key observations, strength and weaknesses of the organization?

Dave Zinsner, Vice President and Chief Financial Officer, Intel: Okay. Alright. Well, just since, you know, I might be making forward looking statements, I ought to say, you know, a safe harbor that we are, you know, if I do make forward looking statements, you should refer to all the risk factors in the SEC filings as filed. Yeah, look, I think it’s a fair assessment that Lip Bu isn’t thinking about massive changes. I think, you know, when he looks at the business, what he feels is the biggest issue at this point is a lack of execution.

Yeah. And, you know, he is attacking that in a number of different ways. He he is really flattening the organization, and, you know, we’re gonna go through a process to flatten the organization in aggregate for Intel, but he’s already done that at the executive team level. I mean, he’s, you know, up, I don’t know, like fifteen, seventeen direct reports. He’s got a lot more engineering leaders reporting directly to him as opposed to having an intermediary report between them.

I think this flattening the organization is important to him because what he wants is the lowest level in the organization to be closer to him, And so that he’s hearing the good, the bad, the ugly of what’s going on so that he can help address those. And I think through that, I think we’ll see a lot of improvement in terms of the execution. He’s also spending a lot of time with customers, Lip Bu’s Rolodexes like nobody else’s, I think, in the semiconductor industry. And I think what he feels was lacking in addition to execution was not enough listening to the customer in terms of what they really need and then going and developing products to meet their demand, their requirements on a long term basis. And so, know, he’s all in on that.

He’s I think he was telling me he like, his longest day was twenty two meetings, I think he said he had, and I think it was on a weekend. So he’s working really hard to go address all of that. Maybe perhaps the one area where I think he will spend more time that could potentially evolve to a different strategy or at least pivot on the strategy is an AI. You know, I I think as I look at the leadership of the organization, you know, we all have our roles. But I think as it relates to AI, I think of Lip Bu as actually the leader of our AI initiative.

And he spent a lot of time investing in that space through his venture fund. And so he understands it at a level that I think is unique for for a CEO in the semiconductor space. And so he is really rolling up his sleeves to make sure he’s we’re we’re developing products that uniquely meet what isn’t getting met today from an AI perspective. And, you know, obviously power is a big issue right now, the cost is a big issue. You know, as you move away from training into inference, as you move away from cloud to on prem to edge, there are different requirements and what he wants to do is find those opportunities with the customers where we can uniquely develop solutions that meet what they need.

That’s probably the only area where I see a meaningful change in how he thinks about that that part of the business. Outside of that, think you’re right. I think the strategy is the strategy. It’s we got to execute better.

Harlan Sur, Semiconductor and Semiconductor Capital Equipment Analyst, JPMorgan: Yeah. And I think as you mentioned, and he mentioned this on the call last month as well, was one of the biggest takeaways learnings was the need to fundamentally transform the culture and the way in which the organization run. Eliminate excess bureaucracy, the need for a flatter organization, smaller teams, stronger decision making authority, very strong focus on execution, right, which implies accountability and transparency. As you mentioned, phase one of the strategy resulted in lower OpEx targets for this year, 17,000,000,000, dollars 16 billion next year, also cut the net CapEx outlay by $2,000,000,000 to $18,000,000,000. But on the organizational side, how is he implementing a more nimble execution focused mindset across the organization, right?

What division teams are reporting to Lip Bu? What has he changed in terms of KPIs, targets, incentives? Because from my perspective, historically, like, this is where prior Intel CEOs have faced challenges.

Dave Zinsner, Vice President and Chief Financial Officer, Intel: Yeah. Yeah. So, part of it is what I already said. He’s flattened his organization. So, now has he’s got the two major businesses, data center and client reporting to him.

He has three different engineering leaders on the product side reporting to him. He has sales reporting to him. He has operations separated from sales now reporting to him. He’ll have government affairs actually reporting directly to him. We have a leader over top of manufacturing and TD that runs, let’s call it 90% of the foundry business.

That person reports directly to him and then the host of the G and A functions. That’s different in terms of in terms of the structure. It’s way closer to decision making, and he wants to, you know, he wants to be able to understand at a very detailed level exactly what’s going on in any part of the organization. So, that’s kind of I think the first cultural step in the culture change that he’s implementing. The second, which is I also said he’s collapsing the number of layers in the organization, and that has that benefit that I talked about which is greater transparency, but it also forces kind of less overhead, less bureaucracy in the decision making, which is part of what has plagued us is a lack of quick decision making.

When you have less layers, have less people that have to check, you know, and sign off on something. Things move more quickly. We’re more nimble in terms of our approach. And so, cost, while the cost reduction I guess was in some ways important in terms of improving the P and L, it had more to do with the cultural change. It’s like, hey, we’re going to reduce the amount of people making decisions, we’re going to reduce all the check the box activities that happen in the company, we’re going get rid of all of those things, we’re going to operate more like a really big startup as opposed to this big Goliath of an organization that just crumbles under its own weight.

So, gone through a lot of that. It’ll take this quarter to kind of work through, you know, what functions need to streamline, what areas are not value added. Another thing that he did, which, you know, I know a lot of companies have done so it may not seem that transformational, but actually is pretty important for Intel in my view, is he has this return to office. Mhmm. You know, we we did have a number of the team that was not working on-site full time, and I think to some extent that has inhibited us and impacted our ability to execute on roadmaps and process.

And so, just forcing that mindset that we’re all going to be back in the office rolling up our sleeves to get things done, I think was an important message to the organization. And then, what I also think has hurt us is, and this has been kind of like the Intel model, is we’ve somewhat developed the technology independent of what we’re hearing from customers, and with kind of an assumption around what we think is needed. And, we heard a lot from customers that we were bringing out products that addressing all of their needs, and probably we’re not taking enough of the information that customers were telling us back to inform us in terms of how to, you know, what we should do from a development perspective. And, he has leaned in a lot, and it’s partly him going, you know, he is going to see customers, he’s going to see CEOs, and the major systems engineers in the company to understand what their requirements are. That of course is something he’s doing and that’s important.

But, it actually goes beyond that. You know, we have generally been, you know, kind of a three layered to customers. We have a sales force, then we have a product management team, and then we have the engineers behind them. And, it was not the default to send engineers to customers. And I’ve seen that in my past in other companies I’ve been CFO of, that when you allow the people designing to go talk to the customers, they hear information in a way that, you know, the sales team for all their strengths just don’t pick up, you know.

And it’s like, you know, actually customer told me that we need a, b, and c, but based on the way they were talking about their system and the road map, they actually don’t know they need EFG. And I’m going to develop EFG into the product because that’s going to actually meet their requirements in a way they weren’t even expecting. And so moving the engineers closer to customer, I think, is a big cultural move for us. Now, as it relates to KPIs which you asked about, obviously what we’ll be looking at is can we develop products in first silicon, a steppings, we have not done that in the past. Is the process yielding in a way that follows along a curve that we expect as performance of the wafers following along the curve that we expect.

We’ll be measuring all of those things clearly. But, I think most importantly, we’re going to measure that we’re actually meeting what customers are asking for, and they’re excited about the products that are coming out.

Harlan Sur, Semiconductor and Semiconductor Capital Equipment Analyst, JPMorgan: You know, normally I would start off the discussion on your product portfolio, but I I I wanna start off with manufacturing because the challenge here for Intel is twofold. One is drive back to leadership position in leading edge process technologies. Right? Because leading edge process technologies drives a big part of the performance of the core compute portfolio. Right?

But, number two is that you can then take your leading edge technology to build and then leverage that to build a world class foundry business. Right? And, again, looks like no change to process technology roadmaps that were laid out by Lip Bu. But, know, what is he doing differently to accomplish this twofold strategy? Right?

And, maybe maybe use 18A process technology as an example. What is the team doing to drive differentiation, better economics on your core products like your upcoming PC client CPU product called Panther Lake, and what are you doing to attract more external foundry customers to adopt 18a?

Dave Zinsner, Vice President and Chief Financial Officer, Intel: That’s a wholesome question. Yeah. So, look, you know, in a lot of ways this is blocking and tackling, you know, the the foundry business. And, you know, while it’s felt relatively challenging as we progressed to get caught up on process, we’ve actually made a lot of headway. To get from where we were to get to a point where we have 18A ramping in the fab is a painful process, it requires a lot of capital investment, it’s never a straight line.

I’ve been through this before in my prior company, you know, catching up on processes is a really hard undertaking. And, it’s not to where we were driving, it’s when you look back, it’s actually a fair amount of progress that we have made. And, when you look at 18A, it has differentiation in it, which to your question, how are we driving differentiation? Having gate all around, what we call ribbon fed together with backside power, which we call PowerVia, that’s actually a pretty innovative solution. And, when I, for the split second I was acting in CEO and they actually let me talk to customers, I heard a lot of positive aspects about that about backside power with gate all around and how inter coils going to be in the future, particularly in high performance compute.

And, you know, customer told me, I will we will never go back from backside power, you know, that the fact that that technology is available to us is critical to our roadmap. So, I think, you know, we are making the progress we need to make on process. Now, you know, the one thing about AT and A was it was developed initially as just something for Intel, and we intercepted it relatively early, and it allowed us to develop PDKs for the industry, but it still was not from the grounds up developed as a foundry node. 14 a is developed from the grounds up as a as a foundry node. It will have PDKs that are exactly comparable to what the industry would expect from us.

Know, a one point o PDK for 14 a is gonna look exactly like a one o PDK to our competitors at that given process. So I think we are at a point where we have driven a lot of maturity. Know, Lip Bu, what he will spend a lot of time on, and maybe something that has always been a challenge at Intel is, as information filters up to the CEO, it gets filtered a lot. Yeah. And, tends to have spin presented in the most positive light.

And, even when Lip Bu was on the board, he was really good at, you know, kind of filtering out some of that spin and really understanding at the at the detailed level exactly where we stood, where we stood on yields, where we stood on performance, you know, how we felt like the waivers would ramp, when we would get to mature yields and so forth. He spent a lot of time understanding that even at the board level, at the CEO level, it’s like to the power of 10, basically what he’s doing. So, I think there we will all have a very clear understanding of where we stand, and when you have a clear understanding of where you stand, you have a clear understanding of what you need to do to improve, you know, improve the process. So, I think that that to me is the major focus of Lip Bu’s as we get into the Intel foundry.

Harlan Sur, Semiconductor and Semiconductor Capital Equipment Analyst, JPMorgan: Yeah. It was good to see it was good to see the good participation at your recent Direct Foundry event, I think held in Santa Clara. And, it was also good to see, to your point, right, that Intel has always had a strategy of, we develop our processes for our products, right? And then, we take this process and whoever wants to use it as external foundry customer go ahead and use it, right? It’s never been with the view of what do our customers really want, right?

What really want, right? But now, it’s you can see the strategy shift. Right? You’re developing, like you said, for eighteen a and for fourteen a. You’ve got several different flavors.

Right? Low power, high performance, and so on. The same type of offerings as your world class foundry competitors. So, the services aspect of foundry is moving more and more towards like, what your customers would expect. That being said, you know, on 18A, you’ve had some traction.

Right? And, previously, I think the team articulated that you were on track to tape out your first external design on 18A in the first half of the year. Did the team execute to that? And then, whether it’s 18A or 14A, I mean, how many customers, external customers, have committed to Intel Foundry? And, you know, are they a mix of fabless semi customers, cloud and hyperscalers, OEMs?

Like, any color there would be great.

Dave Zinsner, Vice President and Chief Financial Officer, Intel: Yeah. Well, the first eighteen a customer is going to be Intel products. Yeah. It’s Panther Lake, and the first SKU is expected to be out by the end of the year. So, is our first win, so to speak, if you put on the Intel foundry hat with 18A.

And really, we always expected that the predominant amount of volume of 18A was going to be internal to us. And we would win customers here or there And we don’t need a lot to fill in the gaps to make 18A a good node from an NPV perspective. So I feel actually pretty good about our ability to drive a reasonable return on 18A. 14 a, you know, obviously, gets more expensive.

At present, it’s expected to have high NA, and, you know, that’s a more expensive tool. So, you know, I think we do need to see more external volume come from 14a versus versus 18a. You know, so far, you know and we’ve we’ve talked about it in the past. We have, like, you know, the traditional, like, pipeline modeling, you know, a bunch of bunch of potential customers, and then we get test chips, and then some customers fall out in the test chips, and then there’s a certain amount of customers that kind of hang in there. So, committed volume is not significant right now, for sure.

But, you know, I think we’ve got to partly prove ourselves a little bit with our own product and eat our own dog food here, and then I think it’s more likely to come that we, you know, we start to see some engagement around customers. But the conversations have been good. I I would tell you that every customer surprisingly, one point under COVID everybody was worried about the supply chain. And then everybody kind of forgot about COVID and the supply chain concerns dissipated I would say. I’d say it’s now back to the more and more I hear customers wanting to have a second source, it doesn’t mean that the competitors or the largest competitor won’t get every bit of share that they want, but I think there’s always a requirement for a second source in these cases, and that’s the opportunity and that’s the area we want to fill.

We also have, I think, really good packaging, and we tend not to talk about that as we think about foundry, but we’ll have revenue in the back half of the year on packaging, advanced packaging, and I think that’s a great opportunity for us. The technology is differentiated already, it’s mature in a way that we still have work to do on the wafer side, and it’s a good vehicle to get customers in the door working with Intel Foundry in an area they have a lot of trust with us, and then kind of work them into Foundry deals over time. I’d say the other thing is, you know, challenge of being a foundry player in construct is that the products business competes against many of the customers that could be potentially customers of foundry. And so, what we have to do is make sure they feel confident that IP is getting protected, but maybe more importantly that supply is protected, that we’re not going to disadvantage them relative to products in terms of supply. I think Lip Bu in that regard is a real asset.

He’s trusted, he does the right thing, if he commits to a customer he delivers on that commitment and customers trust that, that he will do that. That I think has changed the dynamic of the conversations we’ve had with potential foundry customers, but just literally based on him walking in the door and making them feel at ease about those concerns.

Harlan Sur, Semiconductor and Semiconductor Capital Equipment Analyst, JPMorgan: From a from a financial perspective, I believe the target is still to drive Intel foundry to operating profitability breakeven exiting calendar twenty seven. Remind us on the parameters needed to achieve that. Right? Mix of internal versus external customers, process technology mix. And by calendar twenty seven, like, what do you anticipate your external wafer usage as a percent of total wafer shipments will be?

I think today it’s about 30%.

Dave Zinsner, Vice President and Chief Financial Officer, Intel: Yeah. Okay. So, we still feel on track to to hit breakeven sometime in 2027. You know, I think when we committed to it in ’24, we said, hey. It’s gonna be somewhere between ’24 and 2030.

Most people kind of settled in that that must mean ’27, and that’s generally kind of what we’re thinking is we can be breakeven. It doesn’t require a ton of revenue for Foundry. It’s somewhere in the, you know, single digit, called low to mid single digit billions of revenue that foundry’s got to get from external sources. But I would just remind you that some of that’s going to be our partnership with UMC, some of that’s going be our partnership with Tower, some of that’s gonna be packaging, and some of that’s going to be 18 a, some of that actually is gonna be older generations, know, like, example, Intel sixteen. So it’s not a ton that has to come from 18 a for it to to work.

What’s important is that we drive the right amount of volume from Intel products Right. Through foundry, but we’re fairly optimistic that we’ll be able to do that. So I feel highly confident that we’ll break even in 2027 on the Foundry side. What was the other question, Harlan?

Harlan Sur, Semiconductor and Semiconductor Capital Equipment Analyst, JPMorgan: The other one was about Intel on your core products, external versus internal mix. Yeah. Today, I think it’s starting to

Dave Zinsner, Vice President and Chief Financial Officer, Intel: It’s peaky, but I would tell you that we will have a fair amount of volume at external found, you know, mainly TSMC on a go forward basis. You know, products has some latitude as to how they design products. We go through all of that as a team, and of course we want to see a fair amount of the volume come from Intel foundry, but we also recognize there are unique situations and performance requirements that would drive you to another source of the wafer, we want that. We want that because we want to drive the best products ultimately for our customers, and we also feel like it’s a healthy dynamic to have foundry feel like it’s competing Yeah. For every wafer with with Intel products, and, you know, that I think that drives better performance out of Intel foundry as well.

And then I’d say, lastly, you know, when I was at analyst day in what was that? ’22? ’20 ’2 when I came in, we had this concept. We don’t talk about it a ton now, but we had this smart capital concept. I don’t even remember Harlan, and it had, like, all these things that we would use to kind of, you know, enable us to stand up a foundry business, you know, given the capital requirements to do that.

And, one of them was we would have a balance of internal and external wafers from for Intel products. We would leverage the foundry network beyond Intel foundry to provide supply, and that helps offset some of the capital spend and keeps us in a good place from a cash flow perspective. So, it’s somewhat aligned with our capital strategy on a longer term basis.

Harlan Sur, Semiconductor and Semiconductor Capital Equipment Analyst, JPMorgan: So, is the right way to think about the mix maybe 20 to 30%? Yeah, something like that. Okay. Let’s turn over to the core products. You know, on core internal CPU products and internal product development efforts, given Lip Bu’s familiarity and expertise on chip design implementation, know, has he assessed Intel’s chip design and verification flows, IP development capabilities, software development execution.

Right? Where does he see the opportunities to improve the quality, efficiency, execution of Intel’s chip design infrastructure?

Dave Zinsner, Vice President and Chief Financial Officer, Intel: Yeah. I think I think what Lip Bu recognizes coming in is the strong x86 franchise that we have. I mean, in a lot of respects, you could argue that our share should be a lot lower than it is, and it’s not Right. Because we have a really strong ecosystem, and the moats around this business are quite significant. And, you know, I was talking to one of my banker buddies, and he he was telling me that that bank has it doesn’t even think about moving away from Intel the given the the network and the ecosystem and the support that that they get.

And, so, I think that is our advantage that we have that. And, quite honestly, you know, it’s a little bit embarrassing that we’ve developed products that haven’t met customer requirements to the level that we should, because it would be really easy. We could roll out a bed and win market share. So, what what Lip Bu now is trying to make make sure we do, which I somewhat talked about before, is make sure that we are developing products that meet customer requirements. Because we have we have a strong ecosystem where customers want to be engaged with us and we’re developing products that are meeting their requirements, we’re gonna do quite well over time.

And so, that’s primarily what he’s focused on is making sure we’re taking customer input to develop products. I would say beyond that, one of the things that he has identified is, which we’ve known about, is that we do not put products out on an a stepping, you know, on the kind of first attempt at a at a at a product. In fact, I think Sapphire Rapids came out on an e stepping, which is that’s a significant amount of time, you know, going back and forth between design and production to bring out wafers to figure out to get a wafer that actually worked for for customers. He wants to shift left significantly. He basically has mandated we are not bringing out products that aren’t ready, that haven’t been simulated and tested.

Partly it’s just quality, partly it’s you spend a whole bunch of time then fixing it afterwards on the back end when the products aren’t out, know, first time with success. So, he’s shifting left significantly in terms of the development. I think you will see, and maybe back to your KPI question on what should we be looking for, I think one thing you should look for is that he’s attracting talent. You know, I it’s well written, and I think there is some truth to the fact that we have lost talent at the company, and we do need to rebuild that. And, the great thing about Lip Bu is he’s a magnet for talent.

And, so, I think you will start to see people come into the organization at the, you know, senior engineering level, levels that are, you know, world class that will help us, you know, in terms of improving our our design process and ultimately the architecture of the products. That to me, I think is the biggest thing you’ll see in terms of in terms of change.

Harlan Sur, Semiconductor and Semiconductor Capital Equipment Analyst, JPMorgan: In in client PC, you know, the big intro this year is the ramp of your lead 18 a product for PC client called Panther Lake. It was clear that the team slightly downticked this last earnings on the ramp of Panther Lake from what used to be second half of this year to at least one SKU exiting this year. What happened? Is this more of a product delay, in other words, design related issue side, or is this more that the 18A process technology and manufacturing node will be quite ready?

Dave Zinsner, Vice President and Chief Financial Officer, Intel: Yeah. Well, I think it’s a combination. First of all, the market, usually in the way you work this is, and what we’ve done in prior generations is we’ve brought out a first product towards the end of the year in advance for CES, and then you see a bunch of other products ramping through the first half of the following year, and that’s kind of the way we did Meteor Lake, that’s the way we did Lunar Lake. So, Painted Lake is kind of somewhat following along our typical process in that regard. Now, probably if we could have driven harder to get products out more quickly, we would have, you know, we had a drive to that was a bit more aggressive, which is somewhat why we left it open to back half of the year, and it could be any time back half of the year.

We knew we’d at least get some products out or a product out by the end of the year, and was, you know, in some ways hoping that we could bring some things out earlier, but you know, just didn’t happen in the way we were expecting. That said, you know, we feel pretty confident that 18A will be out with a product this year. And I feel very confident that as we progress through next year, we’ll see that ramp and the mix drive towards more Panther Lake. That will be helpful next year from a margin perspective, by the way, because we get a twofer for that. One, we move wafers that were mostly done externally, we move some of that back internally.

So, obviously, Panther Lake has AT and A, that’s internal, that helps us a lot in terms of the profitability over time. But, maybe even more importantly, Lunar Lake, because of the way it was designed, memory in the packaging and we essentially pass that through. We buy it at the same price we’re charging the customer. That’s not the architecture in Panther Lake, so as we move into Panther Lake, the margins just pick up from that perspective too.

Harlan Sur, Semiconductor and Semiconductor Capital Equipment Analyst, JPMorgan: On service CPU product and platforms, launch of Granite Rapids last year was a good was a very good step in the in in in the right direction. Right? You’re shrinking the competitive gap between you and your competitor, but there still is a gap. Right? And, next in the lineup is Diamond Rapids.

What’s the timing on Diamond Rapids? What’s the early feedback from customers? And, when does Intel really fully expect to sort of close that server performance gap with your competitor?

Dave Zinsner, Vice President and Chief Financial Officer, Intel: Yeah. So, we haven’t talked about a date for Diamond Rapids, so I’ll I’ll hold off on that. The product marketing people like to wheel that out at a particular moment in time, and they get mad at me if I jump their gun here. Know, early feedback’s been good, it does close the gap more in terms of the performance. I would just say, you know, our ability to maintain the share we have gets back to that same comment around ecosystem.

Mean the fact that it has, you know, we have maintained a significant amount of share has been a function of the fact that we do have great, you know, great support, great ecosystem, great stack and so forth in the data center space. But, we still have work to do I would say on data center. At the end of the day, we’ve got to develop something that gives customers the best perf per watt really. And, that’s the measure, and so you know we’re you know every iteration of the product has gotten us closer, and you know there’s a far along product after Diamond Rapids that you know does an even better job at driving better performance.

Harlan Sur, Semiconductor and Semiconductor Capital Equipment Analyst, JPMorgan: Last year, on the financials, last year you guys talked about free cash flow breakeven this year, then you pushed that out to free cash flow breakeven exiting this year. Last earnings you talked about focusing more on operating cash flow. So, how should we think about your operating and or free cash flow potential this year? And how do we think about it over the next few years?

Dave Zinsner, Vice President and Chief Financial Officer, Intel: Yeah. We have backed off a little bit on the cash flow for this year mainly given the uncertainty with tariffs and so forth. It’s just a little unclear as to how things will play out for the year. We are very focused on it, would just say. And areas that are in our direct control like capital spending, like operating expenses, like working capital, we are driving to improve the cash flow.

We also are going to augment our cash flow this year with the sale of 51% of Ultera, so that will help out and allow us to delever this year on the balance sheet. Beyond that, my expectation is as we like I said, as we move into Panther Lake, there’s a better cost structure for Panther Lake from the standpoint of margins as we drive better execution on the product portfolio and see that translate into growth. And as we move more and more to the advanced nodes, which have a cost structure that isn’t that different from the cost structure of the older nodes, but yet carries a much higher ASP on a per wafer basis, we see a meaningful improvement there. We get the OpEx down, we drive CapEx efficiencies, our cash flow should meaningfully improve.

Harlan Sur, Semiconductor and Semiconductor Capital Equipment Analyst, JPMorgan: Perfect. Appreciate your participation, Dave, today and look forward to monitoring the progress of the team this year.

Dave Zinsner, Vice President and Chief Financial Officer, Intel: Thank you, Harlan. Yeah. Take care. Thank you very much. Thank you.

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