While there are some ways semiconductor giant Intel (INTC 2.37%) could benefit from the Trump administration's tariff policies and push to bring manufacturing back to the United States, the company is unlikely to be a trade war winner. Economic uncertainty could push down demand for PCs and lead data center operators to pull back on capital spending, bad news for Intel's core CPU business.

Intel's guidance for the second quarter reflects the high level of uncertainty surrounding demand for its products. The company sees revenue coming within a wide range between $11.2 billion and $12.4 billion, down from the $12.7 billion in revenue produced in the first quarter. CFO Davis Zinsner noted in the first-quarter earnings call that the risk of a recession was growing amid the trade turmoil.

An unexpected shift in demand

One surprise that came out of Intel's first-quarter report was a shift in demand in the laptop market to models powered by Intel's older products. In the consumer laptop market, the company is seeing an uptick in demand for Raptor Lake systems and a weakening in demand for Meteor Lake and Lunar Lake systems. Intel's Meteor Lake and Lunar Lake chips are more efficient and enable longer battery lives than their predecessors, but systems built around these chips also have higher price points. Intel noted that OEMs are focusing on lower-priced systems to counter the uncertain economic environment.

There's a silver lining to this shift in demand to older laptop CPUs: A boost to the gross margin. Intel's Raptor Lake chips are manufactured in-house on the mature Intel 7 process node, which is derived from Intel's 10nm technology. In contrast, Meteor Lake uses the newer Intel 4 process, the ramping of which hurt margins as the company moved production to Ireland. Lunar Lake is even worse for the bottom line because it's largely outsourced to Taiwan Semiconductor Manufacturing Company and includes integrated memory.

The downside is that Intel only has so much Intel 7 production capacity. Running those production lines at full capacity makes the company's foundries more efficient and helps with the gross margin, but Intel just can't produce enough of its older Raptor Lake chips to meet demand. Zinsner expects Intel 7 capacity constraints to persist "for the foreseeable future."

Laptops with Intel's newer chips are doing better in the commercial PC market, where the end of Windows 10 support is driving demand for new systems. The company expects this strong demand to eventually flow into the consumer market, but the state of the economy is a wildcard.

Panther Lake is still on track

How this demand dynamic in the consumer market impacts the upcoming launch of Panther Lake remains to be seen. Intel plans to launch some of its Panther Lake SKUs before the end of the year, built on its new Intel 18A process node, with the rest coming in early 2026. Panther Lake is meant to be both powerful and efficient, and it will benefit from Intel's most advanced manufacturing process.

Since Panther Lake will shift more production in-house, the gross margin situation should be improved compared to Lunar Lake. However, the gross margin for the product will also depend on how well the Intel 18A ramp goes and the yields the company is able to achieve. If economic conditions deteriorate in the lead up to Panther Lake's launch, Panther Lake-based systems will need to be able to span a wide range of price points to succeed in what will likely be a tough consumer PC market.

While the increase in demand for Intel's older laptop CPUs is helping the bottom line, the company needs Panther Lake to be a success as it tries to turn around its products business and make its nascent foundry a success. A lot is riding on the Intel 18A process node, and the Trump administration's tariff policies are making Intel's turnaround more difficult.