Intel CEO considers strategic shift in chip manufacturing
Under the proposed strategy, Intel's foundry business would offer external customers a more advanced generation of chipmaking technology, Reuters reported, citing sources familiar with the matter.
The potential shift marks a departure from the plans set by Tan's predecessor and could involve substantial financial implications. Tan officially took charge in March 2025, succeeding Pat Gelsinger.
Since assuming leadership, Tan has been proactive in reducing costs and seeking new avenues to revitalise the struggling US chipmaker. He also expressed concerns regarding the current 18A manufacturing process.
Industry analysts told the news agency that the next-generation process could enhance Intel's competitiveness against Taiwan Semiconductor Manufacturing Co (TSMC).
To discontinue external sales of the 18A and its variant 18A-P processes, Intel may need to write off these assets. It is estimated that such a write-off could result in a financial loss running into hundreds of millions or potentially billions of dollars.
Tan is considering reallocating resources towards the 14A chipmaking process, where Intel expects to hold an edge over TSMC, as per the two sources. This strategy aims to attract large clients such as Apple and Nvidia, who currently rely on TSMC for chip production.
Tan has instructed the company to prepare options for discussion with Intel's board, potentially including the cessation of marketing 18A to new clients. A decision on the matter may not be reached until a later board meeting due to its complexity and financial stakes.
Intel responded to the report by dismissing it as 'hypothetical scenarios or market speculation'.
The company stated that its primary customer for the 18A process has been Intel itself, with plans to increase production of 'Panther Lake' laptop chips by late 2025. These chips are described as the most advanced designed and manufactured in the US.
'Lip-Bu and the executive team are committed to strengthening our roadmap, building trust with our customers, and improving our financial position for the future. We have identified clear areas of focus and will take actions needed to turn the business around,' Reuters quoted Intel as saying in a statement.
In 2024, Intel reported a net loss of $18.8bn, marking its first unprofitable year since 1986. Recent reports indicate that Intel may reduce its factory workforce by 15% to 20% to address ongoing financial challenges.
"Intel CEO considers strategic shift in chip manufacturing" was originally created and published by Verdict, a GlobalData owned brand.
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