Intel has announced its financial results for the fourth quarter of 2025, offering a mixed view of its fiscal health. The company reported a marginal year-over-year revenue decrease from $53.1 billion to $52.9 billion, with quarterly revenue falling approximately four percent from $14.3 billion to $13.7 billion. Despite this decline, the quarterly revenue remained at the higher end of Intel's forecast, which predicted figures between $12.8 and $13.8 billion.
A closer examination of the figures reveals the areas of growth and decline. Intel's data center and AI product segments saw a boost, with quarterly growth at 9 percent and annual growth at 5 percent. Conversely, the client computing group, responsible for Core processors, Arc GPUs, and consumer products, experienced a decline, dropping 7 percent for the quarter and 3 percent over the year.
These insights shed light on the challenges Intel is facing, as discussed during the company's earnings call transcribed by Investing.com. The core issue is a bottleneck in chip production and procurement, prompting Intel to prioritize its resources towards more profitable divisions. This strategic focus might result in shortages or higher costs for consumer processors, coinciding with the impending launch of its promising Core Ultra Series 3 processors, known as 'Panther Lake.'
Intel's CFO, David Zinsner, highlighted that the company is now prioritizing its data center operations, leveraging its internal wafer resources, and opting for external manufacturing of many consumer chips. Notably, the new Core Ultra Series 3 processors are largely produced in-house, marking a shift from the reliance on TSMC's factories for the Core Ultra Series 2.
Zinsner emphasized, “We can't completely vacate the client market,” while explaining Intel's current strategy to “shift as much as we can over to data center to meet the high demand.”
The manufacturing complexity is further amplified by the yields of Intel's new 18A process. Yields, which refer to the number of defect-free chips produced per wafer, are still progressing. CEO Lip-Bu Tan mentioned, “while yields are in line with our internal plans, they are still below what I want them to be,” indicating ongoing efforts to enhance production efficiency.