Tariff Concerns Drive Buyers Toward Intels Legacy Chips, Impacting AI Market Growth

Tariff fears are reshaping Intels market dynamics as customers increasingly opt for older-generation chips to mitigate rising costs linked to U.S.-China trade tensions. While Intels Q1 2025 revenue remained stable due to stockpiling ahead of anticipated tariffs, its Q2 forecast signals contraction, driven by uncertainty over Chinas retaliatory levies and softening demand. The company has announced aggressive cost-cutting measures, including layoffs and reduced capital expenditures, to counter margin pressures exacerbated by its transition to lower-margin Lunar Lake processors and reliance on TSMC for advanced manufacturing. Intels leadership warns of a potential economic slowdown as businesses and consumers react to higher costs, with its data center and AI segments facing steeper declines. This shift toward legacy chips underscores broader supply chain vulnerabilities and challenges Intels long-term strategy to regain dominance in cutting-edge semiconductor markets, particularly in AI-driven segments. The interplay of trade policies and competitive pressures highlights the delicate balance Intel must strike between innovation and financial resilience. (Note: The summary above synthesizes themes from available sources, as the specific TechSpot article URL provided in the query was not included in the search results. Adjustments can be made if the original article content differs materially.)