Intel’s Chipmaking Future Hinges on Securing Key Customers for Next-Gen 14A Technology

Intel has issued a stark warning to investors: without securing large external customers for its next-generation chip manufacturing process known as 14A, the company may be forced to exit its high-end foundry business. In its quarterly filing released Thursday, Intel made clear that the fate of its cutting-edge chip fabrication operations depends on successfully landing big contracts with clients for the new technology.

Newly appointed CEO Lip-Bu Tan emphasized during a post-earnings call that Intel is revamping its strategy by working more closely with external customers during the early stages of chip development. This marks a shift from previous practices, and comes alongside broader cost-cutting measures, including significant layoffs, as the company issued a wider-than-expected third-quarter loss outlook.

For Intel, which has long held a foundational role in the semiconductor industry and famously advanced Moore’s Law, stepping away from leading-edge chip production would be a historic pivot. Despite being the only U.S. company still capable of manufacturing advanced computing chips, Intel has struggled with execution issues in recent years and has ceded market share to rivals like AMD and foundry leader TSMC.

Tan stated that Intel’s 14A process is being developed from the ground up in close coordination with major external partners. He clarified that any future investment into the 14A node and beyond would depend entirely on confirmed customer commitments. Without those, Intel may cancel or pause its plans for 14A and future nodes, although it intends to continue producing chips using its current 18A process through at least 2030.

The CEO underscored that this customer-first strategy is a departure from past internal-focused development efforts, such as with the 18A node. By engaging potential customers early and incorporating their feedback, Tan believes 14A is already shaping up to be more competitive. Still, the company’s future in chip manufacturing now hinges on whether it can earn enough trust—and business—from the global semiconductor market.

Source: Reuters