News Intel might cancel 14A process node development and the following nodes if it can't win a major external customer — move would cede leading-edge ma...

[bga]

Don't build factories unless you can ascertain demand. These are all sensible moves.

If you don't build factories unless you are sure of demand, you are already out of the game.
You need to lead and technological leadership creates demand. If you wait for the orders before building factories, you will get no orders, because the competition already took those orders.

 

[RTXMonster]

Man I feel Lip Poo might work for someone else on the sly. The moment he has stepped in he has done everything in his power and decision making to make sure the foundry side never even gets started. Firing people they need to get it going is just genius 👏

I wonder what these expectations are of his? Unreasonable? Unobtainable? I mean I don't expect them to just jump out the gate taking market share from TSMC. That is a very stupid way of thinking.

Everything this tart does is good for nearsighted investors but in the long run I don't see how all these things don't destroy Intel. Gelsinger at least had a better path for them to be relevant again.

The government better get their Chip Act money back at this point. This whole thing stinks to no end.

 

[thestryker]

Sorry pal, didn't you missed what Jensen said when doing a speech at TSMC? He said doing what they are doing is impossible without TSMC because of packaging.

This is especially true for high end chips, which 18a and 14a are aiming for. It requires packaging ironically, Intel is trying to offer nodes, but with lacking packaging features, resulting in limitation for monolithic design, or being packaged somewhere else unless designing chips with Intel solution.

All of AMD designs are chiplets, beside some monolithic APUs and GPUs. Nvidia is going the same path. Apple is gluing chips to. That's the reason why CoWoS was literally the reason of TSMC dominance, and now they are getting even further to the point that Intel will not be able to compete with TSMC next iteration of packaging solutions.

This is an uninformed take as to the state of the industry and packaging. CoWoS isn't some super advanced packaging technology that nobody else can match, but rather a good high volume packaging technology. Intel has advanced packaging technologies which match the capability of TSMC's some of which are better and some that are worse. What Intel hasn't had, until last year, is enough volume to seriously offer them to external customers. Samsung also has their own packaging technologies, but from my understanding doesn't match all of the capabilities of the other two.

 

[bga]

I think this threat may work. The US cannot allow not to have a semiconductor leading edge manufacturer and/or rely on a foreign company that doesn’t even have their most advanced node in the US. So this means that either there will be a CHIPS Act 2 with money handed to Intel to build these 14A fabs OR the government will force (at least some) fabless US companies to use (at least partially) Intel fabs even if they wouldn’t normally want to do so.

The US governments only chance is nationalizing Intel, putting 100 billion in investment and changing the board. Not going to happen. Nobody else is going to invest in building leading edge Fabs in the USA.

 

[thestryker]

https://www.reuters.com/world/asia-pacific/intels-foundry-future-depends-securing-customer-next-gen-chipmaking-tech-2025-07-25/

Context is everything:
(and something completely missing from tom's )

This... doesn't really mean a whole lot. It's a misrepresentation of reality (which is something CEOs do all the time) to push a specific narrative. While 18A was the first advanced node being pushed for external customers it's also introducing GAAFET and BSPDN the latter being the first industry implementation. These things limit how much external input is plausible. That's one of the benefits of TSMC taking things in a more step by step fashion rather than swinging for the fences.

Intel needs 18A to be good and draw in customers, but they didn't need it to be huge out of the gate. They also need capacity so they can produce their TSV nodes both of which are things they've been missing.

 

[leoscott]

The THW piece is a regurgitation of the WccfTech piece. As is its MO, both pander for clicks in playing up the more sensational elements of Intel's 10-Q to cater to the "Intel is d00med" peanut gallery.

Intel's latest 10-Q (the full Monty): https://www.intc.com/filings-report...0000050863-25-000109/0000050863-25-000109.pdf

Summary: https://www.stocktitan.net/news/INTC/intel-reports-second-quarter-2025-financial-c10jc8w3nntd.html

For more objective commentary, there are plenty, all of which are eminently more qualified than abovesaid clickbait. Just search "Intel Q2 earnings". Here's a nuanced take that covers both the optimist and skeptic views:

https://finance.yahoo.com/video/intel-q2-beat-companys-turnaround-211236407.html

Lip Bu Tan is making foundational changes, along with deep cuts in personnel. When faced with drastic changes, opinions will always span the gamut, because the stakes are high. Significant risk exists. IMO, risk is inevitable, as there are no easy or quick paths to turnaround.

The question is whether you as an investor (raises hand) buy into the CEO's rationale, per below. I do. I have skin in the game.

From Reuters:
=====
In a memo to employees, Tan said Intel is changing its strategy for building manufacturing capacity and now plans to build factories only when the demand for its chips is there. Previously, the company had built factories ahead of demand.

"There are no more blank checks," Tan wrote in the memo. "Every investment must make economic sense. We will build what our customers need, when they need it, and earn their trust through consistent execution."

Intel is now working to bring its so-called 18A manufacturing process, which has few external customers, to high volume. In the memo, Tan said the company plans to take a disciplined approach to investments in the next-generation 14A manufacturing process.

In its securities filings, Intel said that if it fails to find a significant external customer for 14A, it may be forced to exit the chip manufacturing business. The company said it is retaining the option to make all products that need performance beyond its 18A generation at external foundries.

Prior to Tan's tenure, Intel had committed to tens of billions of dollars of new factory construction in the U.S. and elsewhere. On Thursday, Tan wrote the company now plans to slow construction work on new factories in Ohio and halt planned factories in Poland and Germany.

Tan also said the company would consolidate chip packaging operations in Costa Rica with its other packaging operations in Vietnam and Malaysia, breaking with a longtime Intel practice of maintaining operations in separate global regions for supply-chain resiliency.

On a conference call with analysts, Tan's tone suggested he has taken charge of the company and was trying to wrest it back from what he viewed as previous missteps.
"I do not subscribe to the belief that if you build it, they will come," he said on the call. He later added that he will personally review and approve each of Intel's major chip designs.

Tan also said on the call he believes that Intel's 18A technology could generate a reasonable return on investments even if it is used only for Intel's own products. Reuters reported earlier this month that Tan is debating whether to quit offering that technology to external customers.

In business terms Intel is "shrinking into oblivion".
I saw this with my old company, Xerox, who is now a shadow of what it once was.

 

[MJCl]

I wonder if this is a ploy to get some kind of government assistance or bailout...

 

[TerryLaze]

While 18A was the first advanced node being pushed for external customers it's also introducing GAAFET and BSPDN the latter being the first industry implementation. These things limit how much external input is plausible.

Huh?! Am I not understanding you here?! Even if these things make 18A less suitable for external customers, the quotes are about 14A and how they will work with external customers from the get go to avoid these things.
It might need a radical redesign if these things in deed need to go but that's probably why he's willing to drop it if there is not enough guaranteed demand.

Also are you just assuming that these are the things that make 18A less suitable for external use or do you know anything?

 

[phead128]

tip for Intel: you need more than xenophobic fearmongering and free taxpayer dollars to salvage your situation. Try leading in innovation and investing in R&D instead of stock buybacks.

 

[TerryLaze]

I wonder if this is a ploy to get some kind of government assistance or bailout...

If they were after a bail out they wouldn't be trying to lessen the financial blow by selling un-needed things and firing people, they would just pile it all on to make the losses as big as possible.

 

[Gravy405]

Cores cost money per core. If anyone thinks these next gen cpus are going to be same price are cheaper, please pass that pipe i need some dreams fulfilled too.

18a supposedly cost 2.5 times more to produce the same wafer. 52 cores to beat 24 man this is some bad logic.

 

[thestryker]

Huh?! Am I not understanding you here?!

You obviously didn't understand me at all. It's a too many cooks in the kitchen type of situation where the more Intel tried to do with 18A the more difficult making a successful node would be. This means that the opportunity for external input would inherently need to be limited. 14A shouldn't have this problem at all because all of their potential customers already have the 18A PDKs and can provide useful input as to what can be changed to better address their use cases. I'd imagine to some extent this feedback will have shaped 18A-P as well.

 

[TerryLaze]

You obviously didn't understand me at all. It's a too many cooks in the kitchen type of situation where the more Intel tried to do with 18A the more difficult making a successful node would be. This means that the opportunity for external input would inherently need to be limited. 14A shouldn't have this problem at all because all of their potential customers already have the 18A PDKs and can provide useful input as to what can be changed to better address their use cases. I'd imagine to some extent this feedback will have shaped 18A-P as well.

Then what was this part about?!
"This... doesn't really mean a whole lot. It's a misrepresentation of reality (which is something CEOs do all the time) to push a specific narrative. "
If 14A can possibly be much more relevant for external customers then the quotes he did are good.

 

[palladin9479]

Is this the beginning of the fire sale Jim Keller warned about that does not unlock share holder value?

Not remotely and nothing indicates as much.

Intel is in a similar situation that AMD was in, only Intel is way more healthy due it's Enterprise products. This is more a question of future strategy than eminent survival.

They could dump their entire foundry side and still continue to exist, they would be smaller but not dead.

 

[endocine]

"we had some good times, but they're gone" -The Doors

 

[thestryker]

Then what was this part about?!

His implication that Intel simply chose not to work with external partners on 18A rather than having actual reasons to not. Only putting forth part of the story to make the current plans look like a major departure from the path the company was on.

It's kind of like how Gelsinger loved to go on about Larrabee and what a missed opportunity it was. He's right Intel should have gone all in on compute, but Larrabee was very unlikely to be the right way forward.

 

[Stomx]

I read this message as either

1) Management knows that they will fail and hinting government to continue handing money on it for years to come. Then if they still fail they hope that either Emir or donkey will be in a different reality and the management still get their golden parachute

2) This is a hint that some largest investors know that the big problems with Intel are inevitable and have a short order on it

 

[ikjadoon]

If you don't build factories unless you are sure of demand, you are already out of the game.
You need to lead and technological leadership creates demand. If you wait for the orders before building factories, you will get no orders, because the competition already took those orders.

This claim simply does not compute.

Are Samsung & TSMC building brand-new fabs purely on the hope customers will come? No. They waited until current fabs were near capacity, confirmed demand with signed contracts, and then decided to expand.

Intel's fabs are empty of external customers. Intel's own inventory has a major glut.

//

To make this plain and obvious: we should expect zero external customers means maximum one (1) external fab, ready to be used. Not more than one: just one. Why build 2, 3, 4, 5, 6 fabs when you can't even fill one?

Once that first external fab reaches peak capacity and Intel gets confirmed more demand, then Intel expands into a 2nd external fab.

See, no company will send Intel a "huge" order on day 1. It doesn't make sense: external customers want to de-risk, too. Likely any CEO that would send the company's flagship GPU / AI accelerator / CPU to Intel Foundry exclusively would be lambasted and humiliated; it's just too risky when there is no proof Intel can handle it.

//

For gamers here, it's like taking a loan to buy an RTX 5090 with the hope you might become a professional CS:GO player one day and win enough money back in tournaments to pay for that GPU.

Doesn't make sense. Buy within your means, get good, and then expand when you have the necessity.

 

[ikjadoon]

I read this message as either

1) Management knows that they will fail and hinting government to continue handing money on it for years to come. Then if they still fail they hope that either Emir or donkey will be in a different reality and the management still get their golden parachute

2) This is a hint that some largest investors know that the big problems with Intel are inevitable and have a short order on it

This is a 10-Q filing. Every company writes down every possible risk to avoid getting sued later on that they didn't disclose a risk they were aware of.

This section is not written by management nor bean-counters nor even the CEO. This "Risk Factors" is written by lawyers. It's likely someone, somewhere at Intel admitted to a Intel's in-house counsel, "Financially, without external customers, Intel Foundry can't invest after 14A because Intel will not have enough money for 10A or 7A after 14A's R&D costs."

And Intel's lawyer likely replied, "Well, if that is so, I am required by law to admit that as a risk factor in the 10-Q."

External foundries must generate profits to build future fabs.

How else can Intel run the Foundry? Who is going to keep throwing money at Intel? Just look at its stock: the market has not believed in Intel's profit-making abilities for two years already.

This isn't like Intel 22nm or 14nm, where Intel's own products are so popular & so profitable, the entire Foundry is sustained off CPU sales. That is completely impossible at 18A / 14A because of how damn expensive the R&D and equipment and labor and fabs are.

^^ This is what many are missing. Intel needed external customers to continue its Foundry.

No foundry on Earth can ever ship a ~1nm node without massive customer contracts. Nobody has that much money "lying around".

//

That this risk factor is new this quarter implies Intel is admitting it vastly overspent on fabs that still have no customers. Do we get that? Imagine TSMC building fabs that nobody was using. People would think TSMC is putting themselves at unbelievbable risk.

It's already too late for 18A to recoup the costs because external customers never showed up.
To think about it with random numbers:.

18A internal: 1 fab = cost $10 billion, revenue of $12 billion
18A external: 3 fabs = cost $30 billion, revenue of $0

$2 billion in profit is not enough to build another fab.
$2 billion in profit is not enough to develop 14A.
$2 billion in profit is not enough to sustain the Foundry.

These are made-up numbers, but this is the calculus (see below for the real numbers).

How can Intel keep going like this? Fabs aren't a one-time cost: think labor, maintenance, raw materials, utilities (power, water), and God forbid, retooling for the next node.

//

Intel must find external customers and quickly. It just hasn't happened yet and Intel did not save enough to go on this fab spending spree without ever even filling up one fab with external customers.

I'm not sure if people truly get how precarious Intel's financial position is, per the 10-Q:

• Intel has $51 billion in debt.
• Intel has $9 billion in cash on hand.
• Intel is losing $2 to 3 billion per quarter.
• Intel has $109 billion worth of plants & property—with zero external customers.

Intel needed to have a $100 billion piggy bank to go wild on new fabs; it does not. It wasted hundreds of billions on stock buybacks, dividends, and fabs that never needed to be built.

Intel needed to fill 18A fabs to the brim to put that money towards 14A, 10A, and 7A. Intel will need to use 18A for the next 5-10 years, just like TSMC, just to recoup the cost of 18A, much less fund future nodes.

^^ this is why Gelsinger said "We bet the company on 18A."

 

[sjkpublic]

My undertanding is the US taxpayer has already funded millions of dollars to Intel for 14A fab. Was this a free gift to Intel from US taxpayers?

 

[abufrejoval]

The only way I can see this turning around for Intel (as a manufacturing company) is if this is a bid to get the US government to bail them out in a big way. But I don't think even that would work, as the problems appear to be systemic with Intel's foundry side. Basically, the government would have to agree to pour tens of billions per year into the problem to keep leading edge manufacturing by Intel in the US. It would be shocking to actually see that happen — whether you think it's a good idea or bad, I just can imagine there will be enough consensus among the various political factions to make that happen over the long term.

Well that's pretty much what China has been doing from a much less advantageouos position in terms of technology.

But they have a huge and still growing domestic market as well as plenty of other potentials, who'd prefer China's wares over what the US has to offer.

But Intel, Microsoft and the MAGAlaniancs all are doing their best to piss off not just their domestic customer base, but pretty near everyone else on the planet.

And that means that the better technological starting position isn't worth a dime in bailouts.

 

[abufrejoval]

Intel is in a similar situation that AMD was in, only Intel is way more healthy due it's Enterprise products. This is more a question of future strategy than eminent survival.

There is a slight difference in size. And AMD found a buyer who was ready to invest.

They could dump their entire foundry side and still continue to exist, they would be smaller but not dead.

And that buyer didn't just let them dump it either, AMD was tied to Global Foundries almost to the point of choking

Even in the US, where dumping corporate liabilities on whoever happens to live close by has been the preferred choice since the Wild West was grabbed, disbanding the fabs and the people involved may not be that easy or cheap, while I'd rather not think about the piles of toxic materials left behind.

From a belly button perspective all that may look simple, but at sufficient size or magnitude, even light gets bended by gravity.

 

[rluker5]

Man I feel Lip Poo might work for someone else on the sly. The moment he has stepped in he has done everything in his power and decision making to make sure the foundry side never even gets started. Firing people they need to get it going is just genius 👏

I wonder what these expectations are of his? Unreasonable? Unobtainable? I mean I don't expect them to just jump out the gate taking market share from TSMC. That is a very stupid way of thinking.

Everything this tart does is good for nearsighted investors but in the long run I don't see how all these things don't destroy Intel. Gelsinger at least had a better path for them to be relevant again.

The government better get their Chip Act money back at this point. This whole thing stinks to no end.

CHIPS act funds are not disbursed without hitting the milestones: https://www.oig.doc.gov/wp-content/OIGPublications/OIG-25-021-I.pdf

 

[rluker5]

This is a 10-Q filing. Every company writes down every possible risk to avoid getting sued later on that they didn't disclose a risk they were aware of.

This section is not written by management nor bean-counters nor even the CEO. This "Risk Factors" is written by lawyers. It's likely someone, somewhere at Intel admitted to a Intel's in-house counsel, "Financially, without external customers, Intel Foundry can't invest after 14A because Intel will not have enough money for 10A or 7A after 14A's R&D costs."

And Intel's lawyer likely replied, "Well, if that is so, I am required by law to admit that as a risk factor in the 10-Q."

External foundries must generate profits to build future fabs.

How else can Intel run the Foundry? Who is going to keep throwing money at Intel? Just look at its stock: the market has not believed in Intel's profit-making abilities for two years already.

This isn't like Intel 22nm or 14nm, where Intel's own products are so popular & so profitable, the entire Foundry is sustained off CPU sales. That is completely impossible at 18A / 14A because of how damn expensive the R&D and equipment and labor and fabs are.

^^ This is what many are missing. Intel needed external customers to continue its Foundry.

No foundry on Earth can ever ship a ~1nm node without massive customer contracts. Nobody has that much money "lying around".

//

That this risk factor is new this quarter implies Intel is admitting it vastly overspent on fabs that still have no customers. Do we get that? Imagine TSMC building fabs that nobody was using. People would think TSMC is putting themselves at unbelievbable risk.

It's already too late for 18A to recoup the costs because external customers never showed up.
To think about it with random numbers:.

18A internal: 1 fab = cost $10 billion, revenue of $12 billion
18A external: 3 fabs = cost $30 billion, revenue of $0

$2 billion in profit is not enough to build another fab.
$2 billion in profit is not enough to develop 14A.
$2 billion in profit is not enough to sustain the Foundry.

These are made-up numbers, but this is the calculus (see below for the real numbers).

How can Intel keep going like this? Fabs aren't a one-time cost: think labor, maintenance, raw materials, utilities (power, water), and God forbid, retooling for the next node.

//

Intel must find external customers and quickly. It just hasn't happened yet and Intel did not save enough to go on this fab spending spree without ever even filling up one fab with external customers.

I'm not sure if people truly get how precarious Intel's financial position is, per the 10-Q:

• Intel has $51 billion in debt.
• Intel has $9 billion in cash on hand.
• Intel is losing $2 to 3 billion per quarter.
• Intel has $109 billion worth of plants & property—with zero external customers.

Intel needed to have a $100 billion piggy bank to go wild on new fabs; it does not. It wasted hundreds of billions on stock buybacks, dividends, and fabs that never needed to be built.

Intel needed to fill 18A fabs to the brim to put that money towards 14A, 10A, and 7A. Intel will need to use 18A for the next 5-10 years, just like TSMC, just to recoup the cost of 18A, much less fund future nodes.

^^ this is why Gelsinger said "We bet the company on 18A."

I think you may have been carried away by how much 18A capacity you think Intel has. This is another piece of the Tan puzzle that came out a couple weeks ago: https://www.tomshardware.com/tech-i...ith-no-rival-intel-reportedly-to-focus-on-14a that seems to indicate that there isn't a ton of unused 18A capacity. Although the research costs still apply the same.
There are still 3 customers for 18A as well: MS, Amazon and the US gov and Intel is still a big enough customer that their business alone pretty much puts their fabs at the #2 producer spot.

Other than that I can't disagree.

 

[redgarl]

Intel packaged arrow lake themselves although they where chiplet based and made by tsmc....

I hate arguing with people that are delusional. I stated that Intel packaging was inferior in every way and requires special design. Not to mention 3D stacking is not even an option for mass production. Foveros and Pontevechio were nothing but proof of concepts.

From Jensen himself:

"This is a very advanced packaging technology. I'm sorry we don't have any other choice at the moment," and pointed out that TSMC is still the only partner."

- Taiwan Economic Daily

NVIDIA's CEO Claims That They Have No Option Other Than TSMC For Chips, Rules Out Partnership With Intel & Samsung Foundry In The US

NVIDIA's CEO Jensen Huang has reaffirmed the company's commitment to TSMC, claiming that Team Green has no other "suitable" alternatives.

wccftech.com

Not to mention this...

TSMC Outlines Roadmap for Wafer-Scale Packaging and Bigger AI Packages​