Latest news with #foundry
Forbes
8 hours ago
- Business
- Forbes
Intel Just Blinked—And It Could Mean A Breakup Is Coming
29 April 2025, USA, San Jose: Lip-Bu Tan, Chief Executive Officer of Intel, appears at an event ... More organized by the company. Photo: Andrej Sokolow/dpa (Photo by Andrej Sokolow/picture alliance via Getty Images) Most investors chase headlines. I follow behavior. Today, Intel said more about the true state of its business—not in a press release, but in a quiet strategic walk-back that most will miss. Is Intel going for a breakup? Reuters reports that Intel's new CEO is contemplating abandoning efforts to promote its highly anticipated 18A chip technology to external customers, despite having already invested billions in its development and promotion. On the surface, it's a shift in product focus. But beneath this shift, it reveals a deeper behavioral insight. What Just Happened: Inside Intel's Foundry Shift Intel envisioned its 18A chip node as the breakthrough technology that would spearhead its return to advanced chip manufacturing and secure foundry contracts from hyperscalers such as Apple, Amazon, and Nvidia. Now? Intel is quietly shelving it. Instead, Intel will pivot external customers to its newer 14A process, effectively cutting its losses and leaning into a more focused narrative: fewer bets, better execution. At the same time, the company is shuttering its automotive chip division, laying off staff across its foundry unit, and simplifying decision-making inside the fabs. That's not cost-cutting. That's positioning. This action isn't an isolated move; it's a pattern. And patterns in corporate behavior often preceded structural change. Why It Matters: This Isn't Just Capital Discipline—It's Strategic Humility To the average investor, the move looks like textbook discipline: cut a struggling initiative, refocus on core customers, and redeploy capital more efficiently. But for those of us who study special situations, spinoffs, and corporate behavior, it signals something deeper. This isn't just strategy, it's a reset in how Intel thinks. This isn't just about a product pivot. It's a behavioral inflection point—and the kind that often comes before structural change. The Setup: Is Intel Laying The Groundwork For A Breakup? Let's be clear: Intel hasn't announced a spinoff. There's no Form 10, no S-1, and no public timeline to separate the foundry business—yet. But in my experience, corporate breakups don't start with filings. They start with behavior. And right now, Intel is moving like a company preparing to split. Here's what I'm watching: Breakup isn't just about unlocking value. They're about rebuilding trust. Intel isn't there yet—but it's signaling to investors: We've heard you. We're cleaning the house. Stick with us. And for special situation investors, that's a setup worth tracking closely. The Investor Angle: Is This An Opportunity Or A Warning? Intel remains a complex name. But this foundry pullback offers three critical insights for investors watching through a special situation's lens: For now, the situation is not a trigger. But in my experience, the best setups don't come labeled. You need to delve deeper into the details. Special Situations Start Subtly After nearly two decades studying breakups, restructurings, and hidden value plays, one thing is clear: they rarely start with headlines. They start with quiet decisions, internal shifts, and changes in incentives, not narratives. Intel's foundry pivot might not spark a re-rating tomorrow. But for investors who track structural change, this is the kind of move that matters. It's not the event, it's the signal. Flag it. Log it. Watch it. An Intel breakup may be coming. The author owns Intel stock.
South China Morning Post
10 hours ago
- Business
- South China Morning Post
Mainland China chipmaking capacity to outstrip Taiwan by 2030: report
Mainland China is on track to surpass Taiwan in semiconductor foundry capacity by 2030, according to a report from Yole Group, underscoring Beijing's progress in its push for chip self-sufficiency amid ongoing US tech restrictions. Advertisement The mainland's share of global foundry capacity is projected to reach 30 per cent by the end of the decade, up from 21 per cent in 2024, the French market research firm said. Taiwan is currently the market leader with a 23 per cent share last year, while mainland China is already ahead of South Korea at 19 per cent, Japan at 13 per cent and the US at 10 per cent. 'Mainland China is rapidly becoming a central player,' Yole Group said, attributing the shift to Beijing's intensified efforts to build a self-sufficient domestic semiconductor ecosystem since Washington launched a tech war that aimed to curb China's progress in critical areas such as chips and artificial intelligence (AI) Beijing has doubled down on its 'whole nation' approach to its self-sufficiency drive. The state-backed China Integrated Circuit Industry Investment Fund, known as the 'Big Fund', has successfully fostered the development of key companies such as Semiconductor Manufacturing International Corporation (SMIC) and Hua Hong Semiconductor, two of the country's leading wafer foundries. Domestic fabs are set to play a bigger role over the next few years, according to the report, which said local chipmakers accounted for 15 per cent of foundry capacity in 2024. That share will be 'significantly more' by 2030, the report said. Advertisement
CNA
20 hours ago
- Business
- CNA
Intel's new CEO explores big shift in chip manufacturing business
SAN FRANCISCO: Intel's new chief executive is exploring a big change to its contract manufacturing business to win major customers, two people familiar with the matter told Reuters, in a potentially expensive shift from his predecessor's plans. If implemented, the new strategy for what Intel calls its "foundry" business would entail no longer marketing certain chipmaking technology, which the company had long developed, to external customers, the people said. Since taking the company's helm in March, CEO Lip-Bu Tan has moved fast to cut costs and find a new path to revive the ailing US chipmaker. By June, he started voicing that a manufacturing process that prior CEO Pat Gelsinger bet heavily on, known as 18A, was losing its appeal to new customers, said the sources, who spoke on condition of anonymity. To put aside external sales of 18A and its variant 18A-P, manufacturing processes that have cost Intel billions of dollars to develop, the company would have to take a write-off, one of the people familiar with the matter said. Industry analysts contacted by Reuters said such a charge could amount to a loss of hundreds of millions, if not billions, of dollars. Intel declined to comment on such "hypothetical scenarios or market speculation". It said the lead customer for 18A has long been Intel itself, and it aims to ramp production of its "Panther Lake" laptop chips later in 2025, which it called the most advanced processors ever designed and manufactured in the United States. Persuading outside clients to use Intel's factories remains key to its future. As its 18A fabrication process faced delays, rival TSMC's N2 technology has been on track for production. Tan's preliminary answer to this challenge: focus more resources on 14A, a next-generation chipmaking process where Intel expects to have advantages over Taiwan's TSMC, the two sources said. The move is part of a play for big customers like Apple and Nvidia, which currently pay TSMC to manufacture their chips. Tan has tasked the company with teeing up options for discussion with Intel's board when it meets as early as this month, including whether to stop marketing 18A to new clients, one of the two sources said. The board might not reach a decision on 18A until a subsequent autumn meeting in light of the matter's complexity and the enormous money at stake, the person said. Intel declined to comment on what it called rumour. In a statement, it said: "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." Last year was Intel's first unprofitable year since 1986. It posted a net loss attributable to the company of US$18.8 billion for 2024. The Intel chief executive's deliberations show the enormous risks - and costs - under consideration to move the storied U.S. chipmaker back onto solid footing. Like Gelsinger, Tan inherited a company that had lost its manufacturing edge and fell behind on crucial technology waves of the past two decades: mobile computing and artificial intelligence. The company is targeting high-volume production later this year for 18A with its internal chips, which are widely expected to arrive ahead of external customer orders. Meanwhile, delivering 14A in time to win major contracts is by no means certain, and Intel could choose to stick with its existing plans for 18A, one of the sources said. Intel is tailoring 14A to key clients' needs to make it successful, the company said. AMAZON AND MICROSOFT ON 18A Tan's review of whether to focus clients on 14A involves the contract chipmaking portion of Intel, or foundry, which makes chips for external customers. Regardless of a board decision, Intel will make chips via 18A in cases where its plans are already in motion, the people familiar with the matter said. This includes using 18A for Intel's in-house chips that it already designed for that manufacturing process, the people said. Intel also will produce a relatively small volume of chips that it has guaranteed for and Microsoft via 18A, with deadlines that make it unrealistic to wait for the development of 14A. Amazon and Microsoft did not immediately comment on the matter. Intel said it will deliver on its customer commitments. Tan's overall strategy for Intel remains nascent. So far, he has updated his leadership team, bringing in new engineering talent, and he has worked to shrink what he considered bloated and slow-moving middle management. Shifting away from selling 18A to foundry customers would represent one of his biggest moves yet. The 18A manufacturing process includes a novel method of delivering energy to chips and a new type of transistor. Together, these enhancements were meant to let Intel match or exceed TSMC's capabilities, Intel executives have previously said. However, according to some industry analysts, the 18A process is roughly equivalent to TSMC's so-called N3 manufacturing technology, which went into high-volume production in late 2022. If Intel follows Tan's lead, the company would focus its foundry employees, design partners and new customers on 14A, where it hopes for a better chance to compete against TSMC.
Yahoo
21 hours ago
- Business
- Yahoo
Exclusive-Intel's new CEO explores big shift in chip manufacturing business
By Max A. Cherney, Jeffrey Dastin and Stephen Nellis SAN FRANCISCO (Reuters) -Intel's new chief executive is exploring a big change to its contract manufacturing business to win major customers, two people familiar with the matter told Reuters, in a potentially expensive shift from his predecessor's plans. If implemented, the new strategy for what Intel calls its "foundry" business would entail no longer marketing certain chipmaking technology, which the company had long developed, to external customers, the people said. Since taking the company's helm in March, CEO Lip-Bu Tan has moved fast to cut costs and find a new path to revive the ailing U.S. chipmaker. By June, he started voicing that a manufacturing process that prior CEO Pat Gelsinger bet heavily on, known as 18A, was losing its appeal to new customers, said the sources, who spoke on condition of anonymity. To put aside external sales of 18A and its variant 18A-P, manufacturing processes that have cost Intel billions of dollars to develop, the company would have to take a write-off, one of the people familiar with the matter said. Industry analysts contacted by Reuters said such a charge could amount to a loss of hundreds of millions, if not billions, of dollars. Intel declined to comment on such "hypothetical scenarios or market speculation." It said the lead customer for 18A has long been Intel itself, and it aims to ramp production of its "Panther Lake" laptop chips later in 2025, which it called the most advanced processors ever designed and manufactured in the United States. Persuading outside clients to use Intel's factories remains key to its future. As its 18A fabrication process faced delays, rival TSMC's N2 technology has been on track for production. Tan's preliminary answer to this challenge: focus more resources on 14A, a next-generation chipmaking process where Intel expects to have advantages over Taiwan's TSMC, the two sources said. The move is part of a play for big customers like Apple and Nvidia, which currently pay TSMC to manufacture their chips. Tan has tasked the company with teeing up options for discussion with Intel's board when it meets as early as this month, including whether to stop marketing 18A to new clients, one of the two sources said. The board might not reach a decision on 18A until a subsequent autumn meeting in light of the matter's complexity and the enormous money at stake, the person said. Intel declined to comment on what it called rumor. In a statement, it said: "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." Last year was Intel's first unprofitable year since 1986. It posted a net loss attributable to the company of $18.8 billion for 2024. The Intel chief executive's deliberations show the enormous risks - and costs - under consideration to move the storied U.S. chipmaker back onto solid footing. Like Gelsinger, Tan inherited a company that had lost its manufacturing edge and fell behind on crucial technology waves of the past two decades: mobile computing and artificial intelligence. The company is targeting high-volume production later this year for 18A with its internal chips, which are widely expected to arrive ahead of external customer orders. Meanwhile, delivering 14A in time to win major contracts is by no means certain, and Intel could choose to stick with its existing plans for 18A, one of the sources said. Intel is tailoring 14A to key clients' needs to make it successful, the company said. AMAZON AND MICROSOFT ON 18A Tan's review of whether to focus clients on 14A involves the contract chipmaking portion of Intel, or foundry, which makes chips for external customers. Regardless of a board decision, Intel will make chips via 18A in cases where its plans are already in motion, the people familiar with the matter said. This includes using 18A for Intel's in-house chips that it already designed for that manufacturing process, the people said. Intel also will produce a relatively small volume of chips that it has guaranteed for and Microsoft via 18A, with deadlines that make it unrealistic to wait for the development of 14A. Amazon and Microsoft did not immediately comment on the matter. Intel said it will deliver on its customer commitments. Tan's overall strategy for Intel remains nascent. So far, he has updated his leadership team, bringing in new engineering talent, and he has worked to shrink what he considered bloated and slow-moving middle management. Shifting away from selling 18A to foundry customers would represent one of his biggest moves yet. The 18A manufacturing process includes a novel method of delivering energy to chips and a new type of transistor. Together, these enhancements were meant to let Intel match or exceed TSMC's capabilities, Intel executives have previously said. However, according to some industry analysts, the 18A process is roughly equivalent to TSMC's so-called N3 manufacturing technology, which went into high-volume production in late 2022. If Intel follows Tan's lead, the company would focus its foundry employees, design partners and new customers on 14A, where it hopes for a better chance to compete against TSMC. Tan has drawn on extensive contacts and customer relationships built over decades in the chip industry to arrive at his view on 18A, the two sources said.
Yahoo
21 hours ago
- Business
- Yahoo
Exclusive-Intel's new CEO explores big shift in chip manufacturing business
By Max A. Cherney, Jeffrey Dastin and Stephen Nellis SAN FRANCISCO (Reuters) -Intel's new chief executive is exploring a big change to its contract manufacturing business to win major customers, two people familiar with the matter told Reuters, in a potentially expensive shift from his predecessor's plans. If implemented, the new strategy for what Intel calls its "foundry" business would entail no longer marketing certain chipmaking technology, which the company had long developed, to external customers, the people said. Since taking the company's helm in March, CEO Lip-Bu Tan has moved fast to cut costs and find a new path to revive the ailing U.S. chipmaker. By June, he started voicing that a manufacturing process that prior CEO Pat Gelsinger bet heavily on, known as 18A, was losing its appeal to new customers, said the sources, who spoke on condition of anonymity. To put aside external sales of 18A and its variant 18A-P, manufacturing processes that have cost Intel billions of dollars to develop, the company would have to take a write-off, one of the people familiar with the matter said. Industry analysts contacted by Reuters said such a charge could amount to a loss of hundreds of millions, if not billions, of dollars. Intel declined to comment on such "hypothetical scenarios or market speculation." It said the lead customer for 18A has long been Intel itself, and it aims to ramp production of its "Panther Lake" laptop chips later in 2025, which it called the most advanced processors ever designed and manufactured in the United States. Persuading outside clients to use Intel's factories remains key to its future. As its 18A fabrication process faced delays, rival TSMC's N2 technology has been on track for production. Tan's preliminary answer to this challenge: focus more resources on 14A, a next-generation chipmaking process where Intel expects to have advantages over Taiwan's TSMC, the two sources said. The move is part of a play for big customers like Apple and Nvidia, which currently pay TSMC to manufacture their chips. Tan has tasked the company with teeing up options for discussion with Intel's board when it meets as early as this month, including whether to stop marketing 18A to new clients, one of the two sources said. The board might not reach a decision on 18A until a subsequent autumn meeting in light of the matter's complexity and the enormous money at stake, the person said. Intel declined to comment on what it called rumor. In a statement, it said: "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." Last year was Intel's first unprofitable year since 1986. It posted a net loss attributable to the company of $18.8 billion for 2024. The Intel chief executive's deliberations show the enormous risks - and costs - under consideration to move the storied U.S. chipmaker back onto solid footing. Like Gelsinger, Tan inherited a company that had lost its manufacturing edge and fell behind on crucial technology waves of the past two decades: mobile computing and artificial intelligence. The company is targeting high-volume production later this year for 18A with its internal chips, which are widely expected to arrive ahead of external customer orders. Meanwhile, delivering 14A in time to win major contracts is by no means certain, and Intel could choose to stick with its existing plans for 18A, one of the sources said. Intel is tailoring 14A to key clients' needs to make it successful, the company said. AMAZON AND MICROSOFT ON 18A Tan's review of whether to focus clients on 14A involves the contract chipmaking portion of Intel, or foundry, which makes chips for external customers. Regardless of a board decision, Intel will make chips via 18A in cases where its plans are already in motion, the people familiar with the matter said. This includes using 18A for Intel's in-house chips that it already designed for that manufacturing process, the people said. Intel also will produce a relatively small volume of chips that it has guaranteed for and Microsoft via 18A, with deadlines that make it unrealistic to wait for the development of 14A. Amazon and Microsoft did not immediately comment on the matter. Intel said it will deliver on its customer commitments. Tan's overall strategy for Intel remains nascent. So far, he has updated his leadership team, bringing in new engineering talent, and he has worked to shrink what he considered bloated and slow-moving middle management. Shifting away from selling 18A to foundry customers would represent one of his biggest moves yet. The 18A manufacturing process includes a novel method of delivering energy to chips and a new type of transistor. Together, these enhancements were meant to let Intel match or exceed TSMC's capabilities, Intel executives have previously said. However, according to some industry analysts, the 18A process is roughly equivalent to TSMC's so-called N3 manufacturing technology, which went into high-volume production in late 2022. If Intel follows Tan's lead, the company would focus its foundry employees, design partners and new customers on 14A, where it hopes for a better chance to compete against TSMC. Tan has drawn on extensive contacts and customer relationships built over decades in the chip industry to arrive at his view on 18A, the two sources said.
