In response to significant financial challenges, Intel is implementing stringent measures to enhance profitability. CEO Michelle Johnston Holthaus stated that any new product must demonstrate an ability to yield at least a 50% gross margin before development proceeds. This decision comes as Intel's gross margins have recently fallen to 36.9%, while competitors like AMD and Nvidia continue to perform better. Holthaus acknowledges the difficulty of this goal but believes it is achievable through disciplined planning and eliminating costly redesigns post-production.
Mounting losses and financial turmoil has Intel cutting the deadweight, an effort that won't end with axing staff.
Going forward, any product the x86 giant isn't absolutely sure can manage a 50 percent gross margin isn't getting off the drawing board.
Holthaus emphasized that while Intel has neither committed to nor forecast 50 percent gross margins, that's what the company should be aspiring too.
Achieving this, Holthaus said, won't be easy and won't happen overnight.
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