As Intel can attest, ripping off the bandage early is sometimes necessary—but stings just the same.
The chip-making giant said late Thursday that it expects annual gross margins to fall into the 51%-53% range for the next two to three years, a substantial comedown. Intel’s gross margins have typically been above the 60% mark over the past decade. The company has been pursuing an expensive turnaround plan, seeking to catch up to its rivals in the most advanced production processes and open a foundry business to make chips designed by other companies.