Intel’s foundry business is showing promising signs of life, a critical development that could underpin the chip giant’s ambitious turnaround strategy. CEO Lip-Bu Tan expressed optimism about the external manufacturing arm, highlighting its growing significance for the company.
“Foundry is exceptionally important,” Tan stated in an interview. “It represents one of our key national assets.” This strategic pivot towards becoming a foundry services provider is a cornerstone of Intel’s plan to not only produce its own cutting-edge chips but also to manufacture semiconductors for a diverse range of external clients. This move is also aimed at bolstering domestic chip production capabilities in the United States, a move seen as crucial given the historical dominance of overseas manufacturing.
Historically, Intel’s state-of-the-art fabrication facilities were exclusively dedicated to producing chips for its own product lines, powering everything from personal computers to robust data center servers. The aggressive push into the foundry market was championed by Tan’s predecessor, Pat Gelsinger, who recognized the immense potential and the significant investment required to establish Intel as a credible third-party chip manufacturer.
Since Tan assumed the CEO role in March 2025, Intel’s stock has seen a remarkable surge, climbing over 300%. This performance reflects investor confidence in Tan’s leadership and his ability to steer the embattled chipmaker back to a path of stability and growth, especially after a series of challenges. A key question for the market has been whether Intel could truly achieve manufacturing parity with industry leaders like Taiwan Semiconductor Manufacturing Co. (TSMC), the undisputed leader in advanced chip production.
Tan indicated that Intel is making tangible progress toward this ambitious goal. He specifically pointed to advancements in the company’s next-generation 18A manufacturing process, which has been under intense scrutiny by investors as a critical barometer of the turnaround’s success. When Tan took the helm, he described the 18A process as being in a less-than-ideal state.
“I am now seeing the results,” Tan remarked, bringing his extensive experience from leading chip design software firm Cadence Design Systems and his prior tenure on Intel’s board.
A pivotal metric for success in the foundry business is manufacturing yield – the percentage of functional chips produced from a silicon wafer. This directly impacts profitability and builds customer trust. Tan revealed that Intel’s progress on yield improvements has surpassed initial expectations. He noted that achieving a yield improvement of 7% to 8% per month is considered best-in-class, and Intel is now seeing such gains.
These improvements are beginning to attract significant customer interest. As Intel’s manufacturing performance strengthens, Tan reported an uptick in prospective clients exploring the company’s foundry services. While declining to name specific customers, Tan confirmed that Intel anticipates securing commitments from multiple foundry clients in the latter half of the year. “We are actively engaging with multiple customers and are eager to serve them,” he stated.
This outlook aligns with earlier projections from Intel executives. During the company’s April earnings call, Chief Financial Officer David Zinsner indicated that concrete signals from external foundry customers were expected to materialize in the second half of 2026 and extend into early 2027.
Beyond its immediate turnaround, Tan emphasized the strategic importance of the foundry business for the broader U.S. semiconductor supply chain. Intel has made substantial investments in new fabrication facilities, including a new plant in Arizona utilizing the 18A process. However, a separate project in Ohio has encountered significant delays, with production now slated to commence no earlier than 2030.
“Over 90% of our most advanced processors are manufactured outside the United States,” Tan observed. “Therefore, it is vital that we bring some of that capability back domestically.”
Looking further ahead, Tan expressed confidence that Intel’s forthcoming 14A process technology could eventually rival TSMC’s offerings. “It will be on par with TSMC’s timeline, which represents a major, major breakthrough,” he concluded. This development could signify a significant shift in the global semiconductor manufacturing landscape, empowering Intel with advanced capabilities and bolstering domestic technological sovereignty.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/21825.html
