Intel Foundry long-term ambition to become a major player in the chip manufacturing business will be under intense scrutiny as the company reports earnings today. With CEO Lip-Bu Tan now at the helm, all eyes are on how Intel plans to revive its foundry business amid mounting losses and shifting technological priorities.
Analysts are expecting Intel to post a sixth consecutive quarterly net loss and another decline in revenue, with projections pointing to a net loss of approximately $1.25 billion and revenue around $11.9 billion—down 7% year-over-year. But beyond the financials, what matters most to investors is the company’s pivot from its troubled 18A chip process to the more advanced 14A technology.
This strategic shift, aimed at attracting big-name customers like Apple and Nvidia, comes with risks. Abandoning 18A could lead to significant write-downs, potentially in the billions. Yet, the hope is that 14A will deliver the performance and efficiency needed to compete with industry leaders like TSMC and Samsung.
So far, traction in Intel’s foundry services remains limited. External customers have yet to commit in meaningful volume, though test chips are reportedly in development with Nvidia and Broadcom. The company maintains its target of breaking even in the foundry business by 2027, a goal dependent on winning “low- to mid-single-digit billions” in external contracts.
In parallel, Intel is cutting costs aggressively. It has already sold a majority stake in its Altera FPGA unit and is rumored to be planning further divestitures. Workforce reductions have also been implemented as part of the broader restructuring under Tan’s leadership.
For many on Wall Street, today’s earnings may matter less than the signals Intel sends about the future of its foundry strategy. If management can show tangible progress on 14A development and customer engagement, the company might begin to rebuild confidence in its turnaround narrative. If not, investor skepticism could deepen.
The earnings call will be critical—not for Q2 results, but for what Intel says about where it’s going next.
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