Intel Corp at Citi Global TMT Conference Transcript

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

Question: Christopher Danely - Citi - Analyst : Thanks for coming, Dave.

Question: Christopher Danely - Citi - Analyst : (inaudible) I guess, what you call that.

Question: Christopher Danely - Citi - Analyst : Core CapEx. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 3:10PM, INTC.OQ - Intel Corp at Citi Global TMT Conference

Question: Christopher Danely - Citi - Analyst : Okay. Just a few questions to dig into on that. I think Pat talked about this at one of our (inaudible) competitors' conferences last week. Would you say that -- so -- and I think you alluded to it, would you say that the main catalyst for the cost cuts was the second half sort of plan being lowered -- or was there something else there? I'm just wondering (inaudible) turn on the light bolder.

Question: Christopher Danely - Citi - Analyst : Yes. And then, I guess, an operational question. So when you announced the cuts thousands of people and this much money and stuff like that, how do you guys sort of come up with that number because it sounds like most of the cuts will be done by the end of the quarter. Do you just figure, okay, it looks like we're going to get rid of some of these people or this much and that much and then we'll figure out the nitty gritty later or was pretty much most of the specific cuts already done in that number. I'm just kind of curious --

Question: Christopher Danely - Citi - Analyst : And do you feel like the plan you have is fine for now? Or could there be additional cut -- was this the first cut of the cuts? Or could there be anything else?

Question: Christopher Danely - Citi - Analyst : And so we'll definitely see the -- does that mean we'll see the bulk of the impact in Q4 or like Q4 and then first half of next year as far as the bulk of the benefits.

Question: Christopher Danely - Citi - Analyst : Okay. And it seems like you broke out the cost cuts into. There's definitely going to be some sounds like it's a little more towards R&D than SG&A, certainly some product lines and CapEx. Would you say those are the three biggest? And then where do you expect to save more on? Would it be on OpEx or gross margin or CapEx? Or are they all sort of equal?

Question: Christopher Danely - Citi - Analyst : Yes.

Question: Christopher Danely - Citi - Analyst : I think that would be the biggest --

Question: Christopher Danely - Citi - Analyst : Yes. Okay, great. And then you guys talked about moving some manufacturing I forget exactly which line Ireland have resulted in a gross margin impact. Maybe just run us through that, sort of what happened? Where did the miscalculation occur? Is this something you typically do and it was earlier than expected? Or maybe just take us through that?

Question: Christopher Danely - Citi - Analyst : (inaudible) probably.

Question: Christopher Danely - Citi - Analyst : Yes. Do you think that this is something that you'll start to do on a more normal basis? Or is this more of a one-off as far as the early move is going to be a longer-term game --

Question: Christopher Danely - Citi - Analyst : Okay. Let's shift gears a little bit, but stay on the CapEx topic, Chips Act. So you guys have your grant allegedly in hand. How does the sort of CapEx cut fit in with Chips Act? Is Chips Act going to change? Are you already seeing some money flow in. How long is this going to take? Maybe just sort of run us through the expected benefits and time line of the Chips Act.

Question: Christopher Danely - Citi - Analyst : Do you think it will get paid out over a year or [five] --

Question: Christopher Danely - Citi - Analyst : Okay. And then the investment tax credit.

Question: Christopher Danely - Citi - Analyst : Okay. Does the restructuring change anything about the Chips Act as far as --

Question: Christopher Danely - Citi - Analyst : And let's talk about the big news so far this year is splitting of Intel into foundry and design. What can we expect the company to look like in, let's say, three to five years? I mean, you guys have actually given like a six-year timeline. But we see two completely separate companies, separate stocks? Or will this be sort of one entity with two parts? Or what's the vision that you --

Question: Christopher Danely - Citi - Analyst : When we had you here in this same seat last year, you talked about the actual active benchmarking your foundry manufacturing versus other leading-edge foundries was already having tangible benefits. Can you just share with us now that we're a year past it, what has been like the better-than-expected part the separation besides, obviously, waking up the TMG or engineering to wow, this is what TSMC does and we should probably figure it out.

Question: Christopher Danely - Citi - Analyst : And that was the (inaudible) target.

Question: Christopher Danely - Citi - Analyst : It did hurt our P&L. What are the (inaudible)

Question: Christopher Danely - Citi - Analyst : Amazing how that happens.

Question: Christopher Danely - Citi - Analyst : So just to touch on the on the foundry business, a big push for you guys. When can we expect, I guess, material founder revenue for products that are outside Intel?

Question: Christopher Danely - Citi - Analyst : Leads to my next series of questions. So you expect to have material packaging or advanced packaging revenue next year on the foundry side. So that will impact it. And begs the question, what will the margins and like the margin profile look like of that business? Will it be accretive, dilutive, we don't know yet.

Question: Christopher Danely - Citi - Analyst : And so how will the margins go up? Is it just more volume, better yields? Any other (inaudible)

Question: Christopher Danely - Citi - Analyst : Yes. Is the advanced packaging your offerings at (inaudible)? Or is that something else?

Question: Christopher Danely - Citi - Analyst : Okay. Great. So getting back to, I guess, your core so manufacturing. It seems like five nodes, four years all on track, looking pretty good, hit all the milestones products out.

Question: Christopher Danely - Citi - Analyst : (inaudible) out on the shelves?

Question: Christopher Danely - Citi - Analyst : Yes. Great. How to check all those boxes. So manufacturing is on track. We've gone out and said, at some point in the first half of next year, you guys could cat up to the competitor. Do you share that assessment? And when will we start to see some tangible market share gains?

Question: Christopher Danely - Citi - Analyst : Speaking to a client, what's your take on the overall PC market? Is it still healthy? Is it plateauing? We've had other companies talk about that we saw a very strong PC market in the first half. And now there's any headwinds, flattening out, slowing down. Some folks are saying it's fine. What's your take on the --

Question: Christopher Danely - Citi - Analyst : Yes. And so I think you guys talked about a little bit of an inventory build in the PC channel in Q2 that's going to get worked down in Q3, and then it will take about a quarter then portion.