Intel CEO considers major pivot in foundry strategy amid cost and competition pressures

Intel’s new chief executive, Lip-Bu Tan, is evaluating a dramatic change to the company’s contract chipmaking business that could reshape its bid to reclaim leadership in semiconductor manufacturing. According to two people familiar with the matter, Tan is considering halting the marketing of certain cutting-edge chipmaking technology—specifically its 18A process and its variant, 18A-P—to external customers. The move, if adopted, would mark a sharp departure from former CEO Pat Gelsinger’s strategy and could result in a significant write-off for the company, estimated by industry analysts to cost Intel (NASDAQ: INTC) hundreds of millions or even billions of dollars (Reuters, 2025).

Tan, who took over as CEO in March, has acted swiftly to slash costs and chart a new course for the troubled chipmaker. By June, he had begun signaling concerns that the heavily promoted 18A process, which has cost Intel billions to develop, was losing traction with new customers. The company has already invested heavily in ramping up production of “Panther Lake” laptop processors using 18A, which it touts as the most advanced chips ever produced on U.S. soil, with high-volume production expected to begin later this year (Intel, 2025).

However, persuading major tech firms to outsource chip production to Intel’s factories remains essential to the firm’s long-term foundry ambitions. As Intel’s 18A timeline has slipped, Taiwan Semiconductor Manufacturing Company’s (TSMC) competing N2 process remains on track, further pressuring Intel’s efforts. In response, Tan is reportedly pushing to concentrate resources on the newer 14A manufacturing node, which Intel believes could give it a competitive edge over TSMC’s future offerings. The pivot aims to attract customers like Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA), both of which rely heavily on TSMC for their advanced chips.

Options under discussion could be presented to Intel’s board of directors as soon as this month, though a final decision on whether to cease external sales of 18A may not come until later this fall, given the scale of the potential financial impact. Intel declined to comment on what it called rumor or speculation but reiterated that CEO Tan and the leadership team are focused on rebuilding customer trust and improving the company’s financial footing. “We have identified clear areas of focus and will take actions needed to turn the business around,” the company said in a statement.

Despite a landmark investment in next-generation processes, Intel continues to struggle to regain its once-dominant position. Last year marked its first annual loss since 1986, with a net loss of $18.8 billion in 2024 (Intel Annual Report, 2025). Industry analysts note that the 18A process, which includes a novel power delivery method and new transistor design, was designed to match or surpass TSMC’s manufacturing prowess. Yet some observers argue 18A’s capabilities roughly align with TSMC’s N3 process, which entered mass production in 2022—putting Intel a step behind.

Meanwhile, certain production plans using 18A are too advanced to halt, including orders for Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT), which are locked in under existing contracts. Intel confirmed it will meet all customer obligations.

Since taking the helm, Tan has already reshaped Intel’s leadership team and cut layers of middle management, moves aimed at making the company more agile. Shifting focus away from selling 18A to outside foundry customers would be his boldest bet yet, with the hope that concentrating on 14A will help attract high-volume contracts that have long eluded Intel in the mobile and AI markets. Whether this gamble pays off will depend on how quickly Intel can deliver 14A at scale—and whether it can finally regain the trust of the world’s biggest chip buyers.