IDM / Manufacturing

Look, I'll be straight with you — that Q1 print hurt. A $4.3B net loss isn't something you paper over, and I'm not going to try. Most of that bleed was one-time pain from the foundry restructuring and impairments tied to legacy node wind-downs. Once you strip those out, the underlying business is healthier than the headline suggests, and that's where my forecast starts. Two key assumptions drive the next two quarters. First, gross margin holds in the 37–39% band as Intel 18A yields continue climbing and we shift more volume off the aging Intel 7 lines — the Q1 39.4% wasn't a fluke, it's the new floor. Second, operating expenses normalize after the Q1 charge storm; R&D stays elevated because we're still funding the foundry dream, but SG&A and restructuring lines roll off. Revenue trends sideways to slightly up: $13.4B in Q2 reflecting normal seasonal softness, then $14.2B in Q3 as data-center refresh and AI PC pull-through kick in. The top risk? Foundry capex keeps draining cash while customer wins at 18A are still pre-revenue. We need those design wins to convert into wafer volume, or margin expansion stalls. That's the bet I'm making, and I'm not flinching from it.