Intel’s ( INTC ) second-quarter earnings report offered a stark look at the chipmaker’s ongoing transformation under new CEO Lip-Bu Tan. While revenue exceeded expectations, the company’s deteriorating profitability and widening losses in its manufacturing arm sent investors scrambling. Shares fell more than 9% Friday, reflecting skepticism around the turnaround plan and doubts about Intel’s future as a leading chip manufacturer. Foundry Woes Deepen Despite Revenue Beat Intel generated $12.9 billion in revenue in Q2, narrowly surpassing expectations. But that top-line beat couldn’t hide the pain underneath. Gross margin tumbled to 29.7%, a steep nine-point drop from a year ago, weighed down by an $800 million impairment charge, excess depreciation, and cost pressures from tariffs and outsourced production. The foundry business—the heart of Intel’s strategy to compete with Taiwan Semiconductor ( TSM )—continues to hemorrhage cash. Operating losses widened to $3.2 billion, up ...