According to two insiders, Intel's new CEO Lip Bu Tan is exploring significant reforms to its foundry business in order to win major customers. It is considering skipping the 18A manufacturing process and directly adopting the 14A process for new OEM customers.
Insiders say that once implemented, Intel's new strategy for foundry business will no longer include selling certain chip manufacturing technologies developed by the company for a long time to external customers.
Since taking over the company in March this year, Lip Bu Tan has quickly taken action to cut costs and seek new ways to revive this struggling American chip manufacturer. According to sources, in June he stated that the 18A process, which former CEO Kissinger had invested heavily in developing, was losing its appeal to new customers.
A source familiar with the matter stated that in order to shelve the external sales of 18A and its variants 18A-P (which Intel has spent billions of dollars developing), the company will have to make write downs. Industry analysts say that asset write downs in the 18A OEM business could result in losses of hundreds of millions or even billions of dollars.
Intel refuses to comment on such 'hypothetical scenarios or market speculations'. The company stated that the main customer for the 18A process has long been Intel itself, and plans to increase production of its "Panther Lake" laptop chip later in 2025, which the company describes as the most advanced processor ever designed and manufactured in the United States.
Persuading external clients to use Intel's OEM business remains the key to its future development. The company plans to achieve mass production of the 18A chip later this year, and its internal chips are generally expected to be delivered before external customer orders.
According to two sources, Lip Bu Tan's initial response to this challenge is to focus more resources on the next-generation chip manufacturing process 14A, which Intel expects to have an advantage over TSMC.
The company stated that it is customizing the 14A chip according to the needs of key customers to ensure its success.
According to one of the two sources, Lip Bu Tan has instructed Intel to prepare some plans, and the board is expected to discuss the future of the 18A manufacturing process for OEM customers as early as this month.
