Intel’s Chief Financial Officer David Zinsner has issued a stark warning about the potential economic impact of tariffs, as the technology giant reports wider-than-usual revenue forecasts for the second quarter of 2025. The cautionary statement comes alongside Intel’s first-quarter financial results announcement, where the company reported revenue of $12.67 billion.

Financial Performance and Market Uncertainty

The semiconductor manufacturer’s performance slightly exceeded market expectations, yet the company’s second-quarter forecast presents a notably broad revenue range of $11.2 billion to $12.4 billion. This unusually wide spread reflects growing uncertainty in the global technology sector, particularly regarding international trade policies and tariff implementations.

Zinsner emphasised that “fluid trade policies” are creating significant challenges for the company’s ability to make accurate forecasts. The uncertain trade environment is affecting both PC client and datacentre markets, two crucial segments for Intel’s business operations.

Impact on Global Supply Chain

The potential implementation of new tariffs poses substantial risks to Intel’s global supply chain operations. According to Zinsner, these trade measures could significantly increase operational costs and complicate the company’s ability to adapt swiftly to evolving trade regulations.

Intel’s particular vulnerability stems from its significant presence in China, its largest market, where U.S.-manufactured semiconductors might face considerable retaliatory levies. Despite maintaining a diversified manufacturing footprint, the company faces mounting challenges in navigating these complex trade dynamics.

Market Response and Future Implications

Industry analysts have identified a concerning trend where customers are stockpiling chips in anticipation of potential tariff implementations. While this behaviour has temporarily boosted Intel’s immediate results, it raises concerns about potential weakening demand in future quarters once this artificial surge normalises.

In response to these challenges, Intel has implemented strategic measures to enhance operational efficiency, including organisational streamlining and reduction in management layers. These steps aim to better position the company to weather potential economic headwinds.

Broader Economic Implications

The significance of Intel’s warning extends beyond the technology sector, pointing to broader economic risks associated with ongoing trade tensions. As a leading global semiconductor manufacturer, Intel’s experience serves as a bellwether for potential widespread economic impacts of sustained trade policy uncertainty.

The company’s cautious outlook reflects growing concerns about the potential for these trade tensions to trigger a broader economic slowdown or recession, highlighting the interconnected nature of global trade and economic stability.

News Source: CNBC