Intel's stock price fell more than 8% as quarterly losses and the risk of exiting its foundry business put pressure on the stock price

Friday morning tradingIntelShares fell more than 8% after the chipmaker forecast a larger-than-expected quarterly loss and warned it might exit its foundry business - despite new CEO Chen Liwu laying out a transformation plan. Chen Liwu hinted on Thursday that he would abandon the core strategy of former CEO Pat Gelsinger, warning that if there is a lack of investment to support demand, Intel may exit the foundry business, which will endanger hundreds of billions of dollars in assets and deepen theTSMCdependence.

As part of the reform of the foundry business, Chen Liwu said in the earnings call that the company may retain the advanced 18A process technology for its own use and will only promote the 14A process when there is a commitment from a large external partner.

Hendi Susanto, portfolio manager of Gabelli Funds, said: "Intel foundry is a grand narrative, but the current market has doubts about the success rate of 18A. If 18A fails, the whole story will collapse."

Due to financial discipline considerations, Intel has suspended or canceled multiple European and American wafer fab projects. The former U.S. chip manufacturing leader has been losing ground due to years of strategic mistakes and now lags far behind rivals Nvidia and AMD. Intel's stock price has risen by 12.8% this year, while Nvidia and AMD have surged by about 30% and 34% respectively during the same period.

Since taking over in March, Chen Liwu has implemented a strategic reset through business divestitures, layoffs and resource reorganization in an attempt to revive the troubled chipmaker.

"There will no longer be unconditional support," Chen Liwu wrote in a staff memo on Thursday, announcing further layoffs. Intel plans to reduce its headcount by 22% to 75,000 by the end of the year.

"I don't think he's shrinking the front line... they may be adjusting their direction," said Ryuta Makino, an analyst at Gabelli Funds and Intel shareholder. "I would rather they continue to build, but only if there is customer commitment."

Intel's current 12-month forward price-to-earnings ratio is 42.55 times, higher than Nvidia's 33.90 times and AMD's 32.12 times.