Intel's New CEO Explores Big Shift In Chip Manufacturing Business

Intel's new CEO, Lip-Bu Tan, is considering a significant change to the company's contract manufacturing business to attract major customers. The plan involves offering outside customers a newer generation of technology, which analysts believe will be more competitive against Taiwan Semiconductor Manufacturing Co. This shift could potentially be expensive, as it may require Intel to write off its investment in the 18A manufacturing process, which has cost the company billions of dollars to develop. The 18A process has lost its appeal to new customers, and Intel may have to take a charge of hundreds of millions or even billions of dollars to set aside external sales of this process. Intel has declined to comment on this scenario, stating that the lead customer for 18A has always been Intel itself and that it plans to ramp up production of its Panther Lake laptop chips later in 2025. However, persuading outside clients to use Intel's factories remains crucial to its future, and the company is looking to focus more resources on its 14A next-generation chipmaking process. This move is part of an effort to win big customers like Apple and Nvidia, which currently use TSMC to manufacture their chips. The 14A process is where Intel expects to have advantages over TSMC, and the company is exploring this option to stay competitive. Intel's foundry business is a key area of focus for the company, and this new strategy could be a significant turning point in its efforts to revive its business. The company's ability to attract major customers and compete with TSMC will be critical to its success in the future.