Leadership Moves to Reverse Slump
Since taking over in March, Tan has moved quickly to streamline Intel’s operations and identify new paths to recovery after years of competitive setbacks. He inherited a company that had fallen behind industry leader TSMC in advanced chip production and lost ground in key markets such as mobile computing and AI.
Last year marked Intel’s first unprofitable year since 1986, with a net loss of $18.8 billion. As part of his turnaround plan, Tan has reorganized the leadership team, brought in new engineering talent, and worked to reduce what he viewed as bloated middle management.
Focus Shifts from 18A to 14A
A central question now facing Intel’s leadership is the fate of its advanced “18A” manufacturing process—a technology on which former CEO Pat Gelsinger had bet heavily. The 18A node features innovations such as new transistor designs and advanced energy delivery methods intended to match or surpass TSMC’s capabilities.
However, industry analysts say 18A is comparable to TSMC’s N3 process, which has been in high-volume production since 2022. Meanwhile, Intel’s development of 18A has faced delays, making it less attractive to new external customers even as TSMC presses ahead with its next-generation N2 technology.
Sources indicate Tan is increasingly skeptical about the commercial appeal of 18A and its variant, 18A-P. He has begun discussing with his leadership team and board whether Intel should stop actively marketing these processes to new foundry customers.
Instead, Intel would focus more resources on developing its next-generation 14A process, which it believes offers a better chance of securing contracts from major clients like Apple and Nvidia—companies that currently rely on TSMC to manufacture their most advanced chips.
Financial Stakes and Board Deliberations
Abandoning external sales efforts for 18A wouldn’t come cheap. According to one person familiar with the matter, Intel could be forced to take a write-off worth hundreds of millions, if not billions, of dollars—representing the sunk cost of years of development.
Intel has declined to comment on what it called “hypothetical scenarios or market speculation,” but acknowledged in a statement:
“Lip-Bu and the executive team are committed to strengthening our roadmap, building trust with our customers, and improving our financial position for the future. We have identified clear areas of focus and will take actions needed to turn the business around.”
Tan is said to be preparing to present options to Intel’s board, which could begin formal deliberations as early as this month. However, given the complexity and scale of the potential write-off, sources expect the board may not reach a final decision until autumn.
Existing 18A Commitments and Customer Focus
While Intel may curtail new marketing of 18A, it will still use the process for projects already in motion. This includes its own in-house chip designs scheduled for production later this year, such as the “Panther Lake” laptop processors, which Intel describes as the most advanced ever produced in the United States.
Additionally, Intel is obligated to manufacture a limited volume of chips for customers such as Amazon and Microsoft using 18A, due to existing contractual commitments and timeline constraints that make switching to 14A unrealistic.
Both Amazon and Microsoft declined immediate comment on these reports, while Intel reiterated that it will deliver on its customer commitments.
Foundry Ambitions at a Crossroads
Intel’s foundry business, which offers contract chip manufacturing services to external clients, is a key pillar of its broader strategy to re-establish itself as a global semiconductor leader. Winning customers away from TSMC is central to that vision.
Tan’s push to refocus on 14A aims to position Intel with a technology edge that could prove more appealing to high-profile customers. Intel itself has said it is tailoring 14A to meet the specific needs of potential clients.
Industry observers note that while 18A was designed to close Intel’s technology gap, 14A may offer a more compelling route to rebuilding market share—if Intel can deliver on schedule.
High Stakes for Intel’s Future
Ultimately, the deliberations underscore the enormous challenges facing Tan as he tries to guide Intel back to strength. The company is balancing the need to cut losses on past investments with the imperative to invest strategically in technologies that can restore its competitive standing.
For Tan, who brings decades of semiconductor industry experience and deep customer relationships to the role, the decision over how to deploy Intel’s foundry resources will be among the most consequential of his tenure.
Intel’s choice between continuing to market 18A or pivoting more decisively toward 14A could shape the company’s financial results and competitive position for years to come.