Intel Corp at Morgan Stanley Technology, Media & Telecom Conference Transcript

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

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : And just kind of my question, so you went through a CEO transition, lots of transformational stories coming out every day. But it seems like from the way you're talking about on the earnings call and the meetings you've been doing, the strategy is still basically the same. And so maybe give us some perspective on what's happening at Intel now from more of a strategic perspective? It seems like you're still aiming towards the same general goals that you had under Pat. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 11:20PM, INTC.OQ - Intel Corp at Morgan Stanley Technology, Media & Telecom Conference

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Great. That makes sense. So talking about the Board, the Board is now faced with some pretty important decision-making. I know you had some key additions to the Board. Is that something that was put into place after Pat left? It seemed like maybe it was underway before he left. But just generally, the status of the Board additions as you approach the CEO transition.

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Okay. Helpful. So industrial policy was a big focus of Pat's. And the prior Secretary of Commerce went so far as to call Intel the national champion. We have a change in administration, new priorities. But generally, there's still a lot of desire to have US-based manufacturing, US-based foundry. So what's Intel's role now in this? And I know that I'm not asking you to predict all the uncertainty that's out there. But how do you manage the uncertainty that's out there? And how do you make sure that the benefits that Intel was getting that you can retain? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 11:20PM, INTC.OQ - Intel Corp at Morgan Stanley Technology, Media & Telecom Conference

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Yes. Great. That's helpful. So maybe where you are in process technology, 18A, clear leadership potential on paper, from what we've seen, the backside power, everyone agrees is a very elegant approach. How manufacturable is it? Are we still on track? I know the server products maybe slipped a little bit from the original schedule, but is 18A still basically on track?

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Yes. And the change in some of the schedules around server, how much of that is just a standard of conservatism of we actually want to be shipping in volume at those times? Because I feel like if there's one criticism prior was that some of those targets were kind of squishy. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 11:20PM, INTC.OQ - Intel Corp at Morgan Stanley Technology, Media & Telecom Conference

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Great. Okay. Appreciate that. Can we talk about the foundry versus product segmentation? Your product profits are almost offset by the foundry losses. Can you just remind us of the walk-through to breakeven in foundry? And how much of that is reliant upon external foundry wins?

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : But implicit in that, the CPU business gets the benefit, but paying more for those wafers still gives them the same profitability.

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Okay. And then your capital spending, it was a slight downtick from where it was prior, but basically, very similar. You and I have talked about in the past, you have this large amount of construction in progress, which is assets not yet being productively deployed. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 11:20PM, INTC.OQ - Intel Corp at Morgan Stanley Technology, Media & Telecom Conference How do you think that plays out, this incremental spending? Is that filling out empty fab shells that are still construction in progress? Or just what's the dynamic that you need to spend this money, but you still have a lot of assets not yet --?

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : We had a Shell First Strategy.

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : That's more than enough. Just give me one on CapEx.

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Okay. Okay. The -- maybe talk about product a little bit. And I like what the Board did with Michelle. And I just -- I've always had this contrast of when Lisa Su got to AMD. She just focused on product for years and years and years. And I think about how many different things you guys have had to think about in addition to that and how much of the energy went into industrial policy process technology that a TSMC customer doesn't have to worry about at all. So that focus on product seems to me really important. Like, how deep does that go now? And how much is it? I just feel like having better CPUs, not that they're not good, but having -- being competitive is just such a huge deal in terms of getting a stable foundation to invest in these other things. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 11:20PM, INTC.OQ - Intel Corp at Morgan Stanley Technology, Media & Telecom Conference

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Okay. That's very helpful. Maybe if we go through some of the products, client CPU, you had a quarter where you sort of signaled that there was some tariff pull forward. You've also talked about potential share gains around Lunar Lake over the course of this year. Is your view still consistent with that? And that idea of pull forward, I mean, it seems like the total CPU number was a lot faster growth than the PC market. So I think that's -- there's some indication. It's less yours than AMD's maybe, but the totality of it does seem like there was some of that. Just how do you feel about that PC market, both from a share perspective and a unit volume perspective?

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : And the share?

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Okay. Okay. That's helpful. And then server, kind of the same conversation about unit volume and share. And I guess your share is stronger in some parts of the market than others. So a lot of that is going to be mix dependent. But just generally your view on the server market.

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Yes. And I guess what if on the counter to that, there's a big cloud refresh, particularly from consumer-facing cloud where they're just like we need to start replacing these four- and five-year-old servers. It seems like that's probably a headwind for you guys share-wise.

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : And what about the sort of cloud-native Sierra Forest-type products that sort of emulate the higher core counts of ARM. It seems like AMD was saying yesterday they had some success around Bergamo recently. Like do you have optimism around those products?

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Okay. That makes a lot of sense. And then Clearwater Forest potentially being a little later, it also wasn't accompanied with some of the hyperbole that we've heard describing that as kind of clear leadership product. Like some of that is a style bias of who's doing the talking. But the -- your confidence in Clearwater Forest as a product that can regain share in those parts of the product line.

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Yes, yes. The Falcon Shores decision you referenced sort of not bring that to market. So where does that leave you now with regards to AI? I mean it seems -- AI accelerator market seems pretty important but also hard to crack. And so just how are you guys thinking about that?

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Okay. I mean that's a really interesting point. And I think there was a time when you said 99% of all inference was happening on microprocessors. I feel like that's less true today, but there's -- is there an opportunity to actually drive a refresh business around that, where at a CPU level, we start thinking about CPUs as an inference tool, which maybe helps you in terms of speeding up the [refresh]?

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Yes. Okay. Great. A couple more questions and then we can open it to the audience. How are you thinking about both Altera and Mobileye at this point? I guess Altera, there's been some movement. But can you just characterize what's happening there? And are those assets central to what Intel is doing?

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Okay. Very clear. Let's see if we have questions from the audience. Great. So I guess I'll keep going. I guess coming back to the Board's decision here, there's a very clear value case for Intel, I feel like, which is just fix the core products, kind of whatever that means, [fab-light fab], have the fabs IDM 1.0. It seems like you're still more ambitious than that. You're still aiming at something that's IDM 2.0 like in structure. Just how do you think about the balances there? I mean there's obviously a very large opportunity here if you execute all of that, but it would be easier to maybe focus and isolate some of that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 11:20PM, INTC.OQ - Intel Corp at Morgan Stanley Technology, Media & Telecom Conference

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Great. And on the foundry side, there's -- obviously, this has been something that we've been talking about for a very long time. How much expertise do you need to run that business? Do you need people running the foundry business to have a background in it? I know there was the tower thing that didn't come to completion. But now you have a number of partnerships out there to try to resolve that issue. How much expertise do you need to build in addition to process technology? Once you have the process leadership, how much capability do you still need to build in Intel?

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Yes. Okay. Very clear. Yes, I have a question in the front. Sorry. We have a question in the front here, the mic. Great. Thank you. Unidentified Participant Thank you. As investors, what are the, I guess, key milestones that we should be expecting to hear from you as it relates to 18A in the near term? And then I think you partially answered this in your last answer, but what would you say was, I guess, the main reasons why things are taking longer at foundry than I believe was originally expected, especially as it relates to external customers? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 11:20PM, INTC.OQ - Intel Corp at Morgan Stanley Technology, Media & Telecom Conference

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : And Colette did say today, I brought up this idea of, you invested in a second foundry. And she said, yes, maybe someday or third. So she did throw that out there. Still hearing the right things from them. But I guess the key thing from them is they need to see that you're building -- they can obviously make it work, but they need to see that you're building a business around it that it's worth them making that investment.

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Another question. Unidentified Participant Can you elaborate more on your AI strategy, whether it's primarily based on homegrown technology and work that you're doing? And also along the same lines, what are the future steps that we can look out for in terms of the progress that Intel has on that front?

Question: Joseph Moore - Morgan Stanley & Co LLC - Analyst : Great. Any other questions? If not, we'll wrap it up there. John, thank you so much.