Intel CEO Considers Major Strategy Shift, May Abandon 18A Process for External Clients
Intel's new CEO Lip-Bu Tan is evaluating a significant strategic pivot that could see the company abandon its 18A manufacturing process for external customers, according to a Reuters report citing sources familiar with the matter. The potential move represents a dramatic departure from the previous leadership's heavily invested roadmap and could result in substantial financial write-offs.
Since taking the helm in March following Pat Gelsinger's tenure, Tan has been working to streamline operations and reduce costs at the struggling chipmaker. By June, concerns emerged that the 18A process was failing to attract new customers, prompting leadership to explore alternative strategies. The 18A technology had been a cornerstone of Gelsinger's vision for Intel's foundry business, with billions invested in its development.
The proposed strategy shift would redirect Intel's focus toward its 14A manufacturing process, a next-generation technology where the company believes it can mount a more effective challenge against Taiwan Semiconductor Manufacturing Company (TSMC). This approach aims to attract major clients including Apple and NVIDIA, who currently rely on TSMC for their chip production needs.
Industry analysts warn that abandoning external sales of the 18A process could trigger write-offs reaching hundreds of millions or potentially billions of dollars. These charges would reflect the substantial investments already made in developing the technology, adding to Intel's financial pressures following an $18.8 billion loss in 2024—the company's first unprofitable year since 1986.
Despite the potential strategic shift, Intel would maintain its existing 18A commitments, including small-scale production for Amazon and Microsoft, as well as manufacturing its own Panther Lake laptop processors scheduled for late 2025. The company is also developing specialized variants of the technology, with 18A-P planned for 2026 and 18A-PT targeted for 2028.
Intel's board is expected to review these strategic options later this month, though a final decision may not come until autumn given the complexity and financial implications involved. The deliberations highlight the pressure facing Tan as he works to revitalize Intel's competitive position in the semiconductor manufacturing landscape.
Strategic Implications
The potential pivot to 14A technology represents a calculated bet on Intel's ability to leapfrog current-generation processes and compete more effectively with TSMC's established market dominance. By concentrating resources on fewer manufacturing nodes, Intel could potentially accelerate development timelines and improve yields, making its foundry services more attractive to major customers.
However, the strategy also carries significant risks. Abandoning 18A for external customers could damage Intel's credibility as a foundry partner and make it harder to attract future clients. The substantial write-offs would also impact the company's financial recovery efforts at a time when Intel is already facing market pressures.
Intel declined to comment on what it characterized as market speculation, with a spokesperson stating that leadership remains "committed to strengthening our roadmap, building trust with our customers, and improving our financial position." The company's final decision will likely depend on detailed financial analysis and board approval, with implications extending far beyond Intel's immediate manufacturing strategy.