Intel’s New CEO Weighs Major Chip Manufacturing Pivot to Challenge TSMC
By Usha Muthusamy
Intel’s new Chief Executive Officer, Lip-Bu Tan, is reportedly exploring a significant strategic overhaul of the company’s contract chip manufacturing (foundry) business, potentially shifting focus away from aggressively marketing its current 18A node to new external customers. The bold move aims to concentrate efforts on the upcoming 14A process, where Intel believes it can gain a crucial competitive advantage against industry leader TSMC and attract major clients like Apple and NVIDIA, who currently rely on rival foundries.
Sources familiar with the matter indicate that CEO Tan has expressed concerns that the 18A process is becoming less appealing to potential customers. If Intel proceeds with halting external sales of its 18A and 18A-P processes, which have required billions in development, the company would likely need to record a substantial write-off, potentially amounting to hundreds of millions or even billions of dollars.
Proposals for this strategic pivot are expected to be reviewed by Intel’s board as early as this month, although a final decision on 18A’s external market focus might be postponed until a follow-up meeting in the fall due to the complexity and significant financial implications.
Despite the potential shift in external strategy, Intel will continue producing chips using 18A for its internal needs and existing customer commitments, such as those for Amazon and Microsoft. The company states that its primary 18A customer remains Intel itself, with plans to ramp up production of its “Panther Lake” laptop chips on 18A in late 2025. The upcoming 14A process is projected to deliver significant performance gains (15-20%) and lower power consumption (25-35%) compared to 18A, with risk production anticipated to begin in 2027. Intel has declined to comment directly on plans to shift focus away from 18A for external sales.
