Intel foundry gains momentum as customer interest grows

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Intel foundry gains momentum

Highlights

Intel's 18A process yields are improving faster than expected, driving increased customer engagement and anticipated committed foundry orders in the second half of 2025.
Intel shares have surged since March 2025 as market confidence in CEO Tan’s foundry turnaround grows, aided by a preliminary manufacturing agreement with Apple reported on May 8.
Intel's Arizona 18A plant is operational while its Ohio facility faces production delays until at least 2030, with next-generation 14A aiming to compete directly with TSMC.

18A progress supports customer pipeline

As reported by CNBC, Tan says Intel’s foundry business is becoming a central part of the chipmaker’s turnaround as improvements in manufacturing performance begin to build customer confidence.

Speaking on CNBC’s “Mad Money” on Monday, Tan describes foundry as strategically important for Intel and for domestic semiconductor capacity. He says the company has made visible progress in its advanced 18A process, which investors closely watch as a test of whether Intel can restore its manufacturing competitiveness.

Tan says the 18A process was in weak shape when he took over, but adds that yields are now improving at a pace that exceeds expectations. Yield, a key measure of how many usable chips are produced from each wafer, directly affects profitability and the willingness of outside customers to place orders.

The stronger manufacturing metrics are beginning to translate into commercial interest. Tan says multiple customers are already working with Intel and that the company expects firmer foundry commitments in the second half of the year, a timeline that matches comments previously made by CFO David Zinsner on Intel’s April earnings call.

Turnaround carries U.S. supply chain stakes

Intel’s foundry push remains one of the most expensive elements of its broader restructuring, and it marks a major shift from the company’s historical model of producing chips mainly for its own personal computer and server businesses. Former CEO Pat Gelsinger had backed the outside foundry strategy, and investors are now watching whether Tan can deliver enough execution to challenge Taiwan Semiconductor Manufacturing Co.

Market confidence in that effort has strengthened since Tan became CEO in March 2025, with Intel shares rising sharply as investors bet the veteran chip executive can stabilize the company after years of setbacks. A Wall Street Journal report on May 8 says Intel and Apple reached a preliminary agreement for Intel to manufacture some Apple chips, although Tan declines to discuss customers by name.

Tan also frames the business as important to rebuilding advanced semiconductor production in the U.S., saying that more than 90% of the most advanced processors are manufactured outside the country. Intel has already built a new Arizona plant using the 18A process, while its Ohio project faces delays and is not due to begin production until at least 2030.

Looking beyond 18A, Tan says Intel’s next-generation 14A process could eventually compete with TSMC on timing and capability. That prospect, if realized, would strengthen Intel’s long-term position in the global foundry market.

Our earlier coverage of the proposed NextEra–Dominion Energy merger focused on how surging AI and data-center electricity demand is forcing U.S. utilities to pursue larger-scale investment and grid expansion. We noted that the deal is positioned as a way to gain financing advantages and operational scale to build new generation and reinforce networks fast enough for hyperscale clients, while still facing regulatory and customer-cost concerns.

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