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What has to happen in Intersegment eliminations

Model as of

This page changes Intersegment eliminations inside the complete INTC model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

INTC forward model
Horizon
Consolidated fair value $13.93 all other verticals held in this portfolio case
Final-quarter revenue −$5.90B -39% of company revenue
Explicit segment contribution $7.41B EBITDA less segment capex, before corporate items

Scarcity pricing unwinds and the capital programme keeps rising into it. Intel itself says client supply constraints ease over the second half of 2026, and client volume is already falling 8% year over year, so if the 27% ASP gain reverses there is no unit growth underneath it - this case steps client revenue down 8% from 2027 Q1 and server revenue down 12% from 2027 Q3, as price events that leave wafer volume, and therefore Intel Foundry, untouched. Foundry's 2026 Q2 loss improvement was $1.4B of lower period charges against $340M of lower product profit on costlier 18A wafers. Revenue ends 2030 at about $60B, below 2026. The capital programme is held at the base-case schedule in every case, which Intel would not do in this world, so the free cash flow path here is harsher than reality.

Intersegment eliminations

Basis quarter−$5.48B
Final quarter−$5.90B
Final revenue mix-39%

Not a business line but the contra-line that makes the model reconcile: it removes Intel Foundry's internal wafer sales to Intel Products on consolidation. It is the only shape that reproduces reported consolidated revenue with zero residual in all ten disclosed quarters, and it is projected as a coupled ratio of Intel Foundry revenue rather than as an independent growth line.

Last four quarters
2025 Q3 −$4.23B Reported
2025 Q4 −$4.34B Reported
2026 Q1 −$5.25B Reported
2026 Q2 −$5.48B Reported
Elimination of Intel Foundry intersegment revenueA small residual from other intersegment activity, $5M in 2026 Q2
Sequential growth +1.7%/qtr decaying toward +1.5% +1.73%, which is Intel Foundry's +2.0% less 0.27 points, so eliminations fall to 0.948 of Foundry revenue.
Intersegment eliminations

Latest: −$5.90B (2031Q2E)

Period Value
2024Q1 −$4.38B
2024Q2 −$4.28B
2024Q3 −$4.32B
2024Q4 −$4.31B
2025Q1 −$4.70B
2025Q2 −$4.42B
2025Q3 −$4.23B
2025Q4 −$4.34B
2026Q1 −$5.25B
2026Q2 −$5.48B
2026Q3E −$5.50B
2026Q4E −$5.53B
2027Q1E −$5.56B
2027Q2E −$5.58B
2027Q3E −$5.60B
2027Q4E −$5.63B
2028Q1E −$5.65B
2028Q2E −$5.67B
2028Q3E −$5.69B
2028Q4E −$5.71B
2029Q1E −$5.73B
2029Q2E −$5.75B
2029Q3E −$5.77B
2029Q4E −$5.79B
2030Q1E −$5.81B
2030Q2E −$5.83B
2030Q3E −$5.85B
2030Q4E −$5.86B
2031Q1E −$5.88B
2031Q2E −$5.90B

Assumptions & reasoning

  • The ratio of eliminations to Intel Foundry revenue sat near 1.00 through 2025 Q3 and has fallen to 0.950 as external foundry revenue ramped from $22M in 2025 Q2 to $293M in 2026 Q2.
  • The growth rate here is deliberately 0.27 points below Intel Foundry's in both the first and terminal quarter, which glides the ratio from 0.948 in 2026 Q3 to 0.901 by 2031 Q2 - the assumed terminal 0.90 - without an independent driver.
  • The EBITDA margin is negative on a negative revenue line and so contributes positive EBITDA: the disclosed $254M of eliminations operating income on $(5,477)M of eliminated revenue is (4.64)%.
  • Modelled as an independent growth line rather than as a coupled ratio, this vertical would silently break the consolidated revenue total by hundreds of millions a quarter.
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