When Reuters reported last month that Intel (INTC) CEO Lip-Bu Tan had decided not to sell its 18A and 18A-P chips to external customers, it signaled a potential shakeup of the company’s strategy.
Intel had spent billions building out its 18A production line. Landing at least two major external clients was supposed to be crucial for making Intel Foundry profitable and giving it the scale to compete with TSMC and Samsung.
But Reuters said Tan was considering redirecting resources toward the company’s next-generation 14A chip, a product not expected to hit mass production until late 2027 at the earliest.
Even after that enormous investment, Tan was reportedly willing to write off the 18A effort entirely.
Intel walks back… sort of
For now, Intel appears to still be moving ahead with 18A manufacturing, which is expected to support its next three generations of products. But a new development could be even more troubling for its long-term plans.
In a 10-Q filing that accompanied its Q2 earnings, Intel warned it could shelve its 14A manufacturing program altogether.
“If we are unable to secure a significant external customer and meet important customer milestones for Intel 14A, we face the prospect that it will not be economical to develop and manufacture Intel 14A and successor leading-edge nodes on a go-forward basis,” the company wrote.
“In such an event, we may pause or discontinue our pursuit of Intel 14A and successor nodes and various of our manufacturing expansion projects.”
Déjà vu and a possible Trump lifeline
That’s the same hurdle Intel faces with 18A: without at least two big-name clients, its Foundry won’t scale or turn profitable.
Intel CFO David Zinser admitted during a J.P. Morgan conference in May that while “the conversations have been good,” the company hasn’t signed a single client for its Foundry division yet.
Intel has long planned to be its own primary customer for 18A chips, but Tan’s 14A vision aimed for broader commercialization.
Bernstein analysts speculated that Intel’s stark 10-Q language could be a “cry for help” to the Trump administration, noting Intel could play a pivotal role in growing U.S. AI chip manufacturing.
“One semi-plausible thesis around this is that it is a cry for help to the administration coupled with a veiled threat,” Bernstein wrote, but they also warned the warning itself could scare off potential clients who doubt Intel’s long-term commitment to advanced manufacturing.
Jim Osman, founder of The Edge Group, was blunter: “At this point, Intel should just IPO as a meme stock and hope retail saves them. Because the fundamentals sure won’t.”
With its turnaround plan already weighed down by heavy layoffs and delays, the latest uncertainty won’t do much to reassure investors. Intel stock is down roughly 2.7% year-to-date.
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