Intel’s new CEO explores a big shift in the chip manufacturing business

Key Points

• Intel’s new CEO, Lip-Bu Tan, is exploring a significant shift in the chip manufacturing business, potentially stopping marketing 18A and 18A-P technologies to external customers.
• The focus seems likely to shift toward the more advanced 14A process to compete with rivals like TSMC and attract major clients such as Apple and Nvidia.
• This change could involve writing off investments in 18A, costing hundreds of millions to billions, but it aims to strengthen Intel’s roadmap and financial position.

Background

Intel, a leading semiconductor company, has faced challenges recently, posting a net loss of $18.8 billion in 2024, its first unprofitable year since 1986. The new CEO, Lip-Bu Tan, who took the helm in March 2025, is reportedly considering a strategic pivot in the company’s chip manufacturing approach to turn the business around.

The Shift in Strategy

Research suggests that Tan is exploring stopping the marketing of Intel’s 18A and 18A-P chipmaking technologies to new external customers. This is a departure from the strategy of his predecessor, Pat Gelsinger, who aimed to position Intel as a major contract chip manufacturer like TSMC. The evidence leans toward Intel focusing instead on its more advanced 14A process, where it expects technological advantages, to attract major clients such as Apple and Nvidia, who currently use TSMC.

Financial and Operational Implications

This shift could require Intel to write off investments in 18A for external sales, potentially costing hundreds of millions to billions of dollars. However, Intel will continue using 18A for its products, such as the upcoming “Panther Lake” laptop chips, and for existing commitments to clients like Amazon and Microsoft, with production ramping up in 2025. The decision is complex, with options to be discussed with the board as early as July 2025, but a final resolution might be delayed to an autumn meeting.

Supporting Information

For more details, you can refer to recent reports:

• Yahoo Finance
• The Edge Markets

Comprehensive Analysis of Intel’s Chip Manufacturing Strategy Shift

Introduction

As of July 2, 2025, Intel Corporation, a pivotal player in the semiconductor industry, is navigating a critical juncture under the leadership of its new CEO, Lip-Bu Tan. Recent reports indicate that Tan is exploring a significant shift in Intel’s chip manufacturing business, particularly concerning its contract manufacturing strategy. This analysis delves into the details of this potential change, its implications, and the broader context, drawing from multiple sources to provide a thorough understanding.

Strategic Shift in Chip Manufacturing

Intel’s new CEO is reportedly considering ceasing the marketing of its 18A and 18A-P chipmaking technologies to external customers. This move marks a departure from the vision of former CEO Pat Gelsinger, who had heavily invested in making Intel a competitive contract chip manufacturer, akin to Taiwan Semiconductor Manufacturing Company (TSMC). The 18A process, roughly equivalent to TSMC’s N3 technology in high-volume production since late 2022, is seen as losing appeal to new customers, prompting a strategic pivot.

Instead, the focus is shifting toward Intel’s next-generation 14A process, where the company believes it can gain a technological edge. This shift aims to position Intel to attract major clients such as Apple and Nvidia, who rely on TSMC for their manufacturing needs. The strategy is part of a broader effort to strengthen Intel’s technological roadmap and regain competitiveness in the semiconductor market.

Financial and Operational Details

Implementing this shift is not without cost. Reports suggest that stopping the external sales of 18A and 18A-P could lead to a write-off of investments, ranging from hundreds of millions to billions of dollars. This financial burden is significant, especially given Intel’s recent financial performance, which saw a net loss of $18.8 billion in 2024, marking its first unprofitable year since 1986.

Despite the potential cessation of marketing 18A to new external customers, Intel will continue to utilize this technology internally. For instance, the company plans to ramp up “Panther Lake” laptop chip production using 18A in 2025, positioning these as the most advanced processors designed and manufactured in the US. Additionally, Intel has existing commitments to produce chips via 18A for Amazon.com and Microsoft, with deadlines making it unrealistic to wait for the 14A process for these clients.

Timeline and Decision-Making Process

The decision-making process is underway, with options expected to be discussed with Intel’s board as early as July 2025. However, given the complexity and high stakes involved, a final resolution might be delayed to an autumn meeting. This timeline reflects the need for thorough evaluation, considering both the shift’s financial implications and strategic importance.

Broader Context and Competitive Landscape

Intel’s strategic considerations must be viewed against intense competition in the semiconductor industry. TSMC, a dominant player, has been in high-volume production with its N3 technology since late 2022, putting pressure on Intel to innovate. The focus on 14A is seen as a response to this competition, with Intel aiming to offer superior technology to win back major clients. This aligns with Tan’s broader efforts since taking the helm in March 2025, which include an AI overhaul, aggressive manufacturing shifts, and cutting middle management, following a reported $19B loss earlier in the year.

Stakeholder Reactions and Industry Insights

Recent social media discussions, particularly on X (formerly Twitter), have highlighted the news, with posts from reputable sources like Reuters emphasizing the potential change in Intel’s contract manufacturing business. While specific reactions from industry experts vary, the consensus acknowledges the necessity of such a shift given Intel’s financial challenges and competitive pressures. For instance, posts from March 2025 noted Tan’s aggressive approach to shake things up, which aligns with the current strategy.

Detailed Breakdown of Key Information

To organize the wealth of information, the following table summarizes the critical aspects of the shift:

Conclusion

Intel’s exploration of a big shift in its chip manufacturing business under CEO Lip-Bu Tan reflects a strategic response to financial challenges and competitive pressures. By potentially stopping the marketing of 18A to new external customers and focusing on the advanced 14A process, Intel aims to strengthen its position, attract major clients, and improve its financial health. This move, while costly in the short term, is seen as crucial for long-term sustainability, with ongoing discussions expected to shape the company’s future in the semiconductor industry.