Intel’s older chips get a second life from US-China trade tensions

A Sino-US trade war that threatened Intel’s revenue from its biggest market, China, had become an unlikely driver of demand for the embattled chipmaker’s older generation of personal computer and server chips, company executives said on Thursday.

A worsening economic outlook and the prospect of higher prices brought on by US President Donald Trump’s sweeping global tariffs and Beijing’s retaliatory levies are prompting customers to fall back on cheaper, older processors.

“In clients, we are seeing strong demand on older-gen parts and in data centre as well,” chief executive of Intel’s products unit, Michelle Johnston Holthaus, said during a call after Intel posted results. She was referring to units that provide chips for personal computers (PCs) and servers.

“Macroeconomic concerns and tariffs have everybody hedging their bets,” she added.

The Santa Clara, California-based company delivered a dour forecast for the June quarter but handily beat Wall Street estimates for first-quarter sales as customers stockpiled chips in anticipation of steep tariffs.

US President Donald Trump’s global tariffs and retaliatory tariffs imposed by China have boosted demand for older, cheaper chips. Photo: Getty Images via AFP

While Trump has for now exempted chips from tariffs, a major hit to Intel could come from China’s retaliatory tariffs on US imports, with chips manufactured in the US set to face levies of 85 per cent or higher, based on the state-backed China Semiconductor Industry Association’s notice earlier in April.

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