Intel Corp at Barclays Global Technology Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Tom O'Malley - Barclays Corporate & Investment Bank - Analyst : <_ALACRA_META_ABSTRACT>Why don't we start off with the question that everyone's been asking you since Monday of last week, which is change of regime. How do you guys think things will differ with you two at the helm versus when Pat was at the helm? Michelle Holthaus - Intel Corp - Interim Co-CEO & CEO - Intel Products Want me to start?

Question: Tom O'Malley - Barclays Corporate & Investment Bank - Analyst : Super helpful. Why don't we start with Michelle? So in the recent earnings call, you talked about more outsourced silicon in 2025 than 2024. In the future, do you see that trend increasing or can maybe speak to the next couple of years in your mind? Michelle Holthaus - Intel Corp - Interim Co-CEO & CEO - Intel Products Yes, the answer is kind of maybe, maybe not. I mean, when we're thinking about Intel products, we're really looking at time to market, performance area, cost, a lot of things when we're thinking about who is the right manufacturing partner for us for products that we're building. And so maybe to take a step back, when I was running CCG, the way I made those decisions is really looking at, okay, you have a market window that you have to hit in client, right? You have your holiday and you have your SIP or your commercial buying cycle. So your products have to hit those windows. Obviously, we have a very broad set of product portfolio, and you need a variety of price points and a variety of performance price points as well. And so you look at those and you look at what Intel Foundry can offer, and you look at what TSMC can offer. And what I found was, at times, picking TSMC was the right decision because where I could land on their performance price curve made the most sense for the ASP that I could get at the time; and then other times, it made sense to use Intel Foundry. Now we are using Intel Foundry for Panther Lake, which is our 2025 product, which will land on 18A and this is the first time that we're customer zero in a long time on an Intel process. And so, just as you would expect Apple experiences with TSMC, you make progress, you take a few steps back, and then you make progress moving forward. But we're quite happy with the decision to be on 18A. But I'll also say TSMC has been a fantastic partner. They're very easy to work with. And myself, being very customer oriented, what I tell everybody at Intel every day is they're the benchmark for what's expected in the industry. And so I feel like working with the Intel REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 12, 2024 / 4:40PM, INTC.OQ - Intel Corp at Barclays Global Technology Conference Foundry, I can continue to push the bar to make us more competitive and set expectations for what it means to be a world-class foundry.

Question: Tom O'Malley - Barclays Corporate & Investment Bank - Analyst : And I think you guys have talked historically, customer interaction, customer announcements are the best way that at least people in these seats can track the progress there. Is there anything else that you would offer now that you've had two full weeks under the covers here to talk about milestones in terms of what we could look for to say, hey, 18A is on track or to give us a little more comfort on that?

Question: Tom O'Malley - Barclays Corporate & Investment Bank - Analyst : Okay, so there's the technology roadmap, and then there's the execution in the near term that helps the profitability as well. And we spent some time last night, Dave, talking about profitability actions in the near term. Do you want to talk about Altera and your Mobileye stake? Those are two actionable items that you guys have talked about in the past. Can you maybe spend a little time on the health of those businesses first and then maybe potential plans for those two assets?

Question: Tom O'Malley - Barclays Corporate & Investment Bank - Analyst : One of the defining moments of this past year was your initial efforts on cost and the right-sizing of the business. Are we done with that endeavor at Intel? Obviously, it's a painful exercise for any company to go through, but do you think there is additional ways that you could right-size profitability standing still today?

Question: Tom O'Malley - Barclays Corporate & Investment Bank - Analyst : I want to go back there, but just one more on Dave's comments. So the offsets are obviously a big deal as well. You're having a regime change. There's been, I think, [vocal tweeting], so I guess tweets and conversation about potentially eliminating some of that funding. How would you view spend if you were to see a change in that type of support?

Question: Tom O'Malley - Barclays Corporate & Investment Bank - Analyst : Okay. On the product side, what I wanted to touch on was the AI PC. So a lot of debate as to what is an AI PC. You guys have talked about it from a product line perspective. So when you sell a certain type of product, that is an AI PC. Can you talk about 2025? Is this an inflection year in what you guys define as AI PC? Would you define AI PC differently? And is that something that helps Intel in terms of unit volume, or is this an ASP uplift, or is this net-net just a redefinition of the existing market? Michelle Holthaus - Intel Corp - Interim Co-CEO & CEO - Intel Products Yes, it's a good question. So AI PC obviously started in 2024, and we've openly stated we'll sell about 40 million units this year. But I'm also a pragmatist. Most of those are being used in the same way you're all using your notebooks today. We've done a large investment in working with the software ecosystem to bring over 400 ISVs to the marketplace because you need to start seeing those usage models that really drive why you would buy hardware. And so when I look at 2025, between all the work that we're doing, the work that you've seen Microsoft doing, I do think you're going to start to see more demand for, I need an AI PC. There's a lot of versions of what an AI PC is. At the end of the day, I think the one thing the entire industry aligns on is you need a neural processing unit to do the low latency work in the background that allows you to have battery life but to be doing those AI workloads all day long. And so we're all aligned on that. So when I think about 2025, I think it's volume. You'll certainly see ASP uplift that comes with AI PCs as well. And you're going to start to see a lot of the CIOs making investments for future proofing. So they may not know exactly how they want to use an AI PC

Question: Tom O'Malley - Barclays Corporate & Investment Bank - Analyst : So there's two threats, I think, to the PC market that I think I'd just like to hear your opinion on. Obviously, there's the ARM ecosystem. So you had Qualcomm talking about by 2030, 50% of the market moving to ARM PC, which an aggressive number, I think, by many people's standards, but anyway, still something to notice. And then two, obviously you've been on the road for the last two weeks probably talking to customers, and your competitive dynamic with AMD where if you hear about a leadership change, the instant reaction from some customers, what's the roadmap? Where are we going here? So can you talk about those two threats and how that may impact the next couple years? Michelle Holthaus - Intel Corp - Interim Co-CEO & CEO - Intel Products Absolutely. So when we think about ARM, obviously the Apple machines are all based on ARM, and they've been 8% to 9% pretty relatively stable from a growth perspective. And Qualcomm makes up about less than 1% of the PC market today. And if you look at the investment in ARM, you look at the work that Microsoft's done, I mean, there has been a very large push to make ARM ubiquitous in the PC. And there's some real challenges to ARM being ubiquitous in the PC. You will never hear me say that it will not happen, because competition makes us better. And as long as you're constantly worried about who's knocking on your door, you're going to constantly be innovating and making sure that you don't have blind spots. But we do see that there's still a lot of incompatibilities. I mean, if you look at the return rate for ARM PCs, you go talk to any retailer, their number-one concern is, wow, I get a large percentage of these back because you go to set them up and the things that we just expect don't work, right? And Apple did a lot of that heavy lift for ARM to make that ubiquitous with their iOS and their whole walled garden stack. So I'm not going to say ARM will get more share than it gets today. But there are certainly, I think, some real barriers to getting there. And I think another barrier is we took too long at Intel to become performance and power oriented. And we made a massive leap with our Lunar Lake product last year. We are as performant on performance and battery life as most ARM devices out there. And so for our customers, a lot of them are saying, okay, you're finally in the ballpark of being focused on all these right things. Therefore, I believe I can bet on an x86 architecture. When it comes to AMD, we both kind of have the same bet, right? When we think about the work that Lisa's doing and the work that we're doing, we believe that x86 is the best overall basic architecture, and we'll continue to build upon that. I've spent a lot of time with customers in the last two weeks, as you can imagine. Probably the thing that is the most exciting about the last two weeks, despite a lot of very, very difficult conversations, is customers want us to be successful. Our customers have decades of relationships with Intel, and those don't go away overnight. I've seen customers lean in. I've seen customers change their roadmap. I've seen customers say, Michelle, I need you to look me in the eye and tell me that your say-do ratio is going to continue as it has for the last three years, and that you're going to tell me if something changes. And so there's a lot of trust built up there. We have a lot more trust to continue to build. And I'm not saying it's not going to be bumpy, and I'm not saying that others won't take advantage of certainly the few potholes that we've had in the last couple weeks. But I feel good about where we are, particularly on the client side. But my say-do ratio for my customers, I want it to be perfect. I ran sales for a long time. Nobody likes to send a dear customer letter, ever, the worst thing you can do to your customers, because they bet on you. They bet their business on you. We have a lot of work to do on the data center side, which I'm sure you'll ask me about, but we have a lot of work to do there. But on the client side, our say-do ratio for the last four years has been very good. We've met our schedules. We've met our performance. You can expect that to continue, but everybody is really excited about the PC market, as you said. So we have more competitors REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 12, 2024 / 4:40PM, INTC.OQ - Intel Corp at Barclays Global Technology Conference than we've ever had. You will see more competitors enter the marketplace in 2025, and we're going to have to be on our toes in making sure that we're winning.

Question: Tom O'Malley - Barclays Corporate & Investment Bank - Analyst : Yes, thanks for the title. Forgive me for not also saying CEO, but I am remiss to not mention. So following up on the PC side, just jumping right back into it, the data center side, it seems like you're more comfortable on the PC side than you are on the data center side. Could you talk about the x86 dynamic in the data center first, and we can move to AI in a little bit? But where are the differences versus where you are in PC, and why does you're feeling seem a little bit more, I would say, skeptical about where you're at today? Michelle Holthaus - Intel Corp - Interim Co-CEO & CEO - Intel Products Yes, I mean, I don't think it's a surprise to anybody. We've had some big challenges on the data center side from a market segment share perspective, from a competitiveness perspective. We've talked about those, and as you look at data center market moving forward, there's not a lot of TAM growth. It's really about core count growth in that. And for us, 2025 is a year of stabilization. We've been talking about that since Q2, about stabilizing that market segment share loss, being really laser focused on building the right products to regain share. We have two products coming with Clearwater Forest and DMR. Now I'm going to blank on what that stands for. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 12, 2024 / 4:40PM, INTC.OQ - Intel Corp at Barclays Global Technology Conference

Question: Tom O'Malley - Barclays Corporate & Investment Bank - Analyst : With this products-first mindset, and forgive me, it's the question everyone asks as well, you've been more open about outsourcing in your PC business. If you get to a point where you feel like for your products to be competitive, you need to move in that direction as well. Is that something that the two of you would feel comfortable moving forward with, or would you wait to have someone move in? I know that's a tough question, but how would you think about that? Michelle Holthaus - Intel Corp - Interim Co-CEO & CEO - Intel Products I would feel very comfortable with it. Because at the end of the day, bluntly, I can be attached to my Intel Foundry. But if I have a losing product, that doesn't really help. I need to build world-class products that my customers are excited about and they want to buy. And if that means landing something on our data center roadmap on TSMC, I'll do it. Do I think long term it will come back to Intel? I do, because I do think we have a good roadmap, and I do think we're making positive progress. But in the short term, if that needs to be done, I'll make that decision.

Question: Tom O'Malley - Barclays Corporate & Investment Bank - Analyst : You talked about holding hands with several partners on this journey to start on the product side. On the Foundry side, increasingly we're hearing more announcements from you guys. Could you give us an update on the pipeline right now, and how things are kind of trending over the last several months?

Question: Tom O'Malley - Barclays Corporate & Investment Bank - Analyst : Well, with that, there's time. But I know that everyone in this room is wishing you the best. Thank you both very much for being here.