Intel reports 20% revenue drop, cuts full-year 2022 guidance

According to Nikkei Asia, Intel's third-quarter revenue plunged 20% as the semiconductor industry braced for weaker global chip demand due to a macroeconomic slowdown and tighter U.S. controls on Chinese exports.

The U.S. chipmaker warned on Thursday of more declines in the fourth quarter and lowered its full-year guidance for 2022. The revenue woes are putting more pressure on cash flow as the company spends billions to expand its chip foundry business to compete with TSMC and Samsung. In response, Intel said it planned to cut costs by $3 billion in 2023 and as much as $10 billion by 2025.

"There is a high degree of macroeconomic uncertainty and the current challenging market environment appears set to extend into 2023 with the potential for a global recession," Intel Chief Financial Officer David Zinsner said on the earnings call. "

Intel announced in early October the creation of an in-house foundry model, which will create some separation between the contract chip manufacturing division and its chip design business. Intel said this will help foundry teams treat internal and external customers more equally and improve cost efficiency.