Intel Rediscovers Key to Foundry Success

Don’t call it a comeback.

Actually, wait. In this case, definitely call it a comeback.

Shares of Intel popped 7.3% on Tuesday after scoring an upgrade from KeyBanc Capital Markets analyst John Vinh, who said the company’s progress in leading-edge chips has positioned it to take Samsung’s spot as the world’s No. 2 foundry behind the Taiwan Semiconductor Manufacturing Company (TSMC). In this case, settling for the silver medal is pretty swell.

Leading Edge Of Your Seats

In extremely technical terms (that, quite frankly, we don’t understand but will try our best to communicate anyway), Vinh says Intel’s yields in the 18A-node chipmaking process — which occur on a staggeringly small scale of just 1.8 nanometers — have now reached 60%. That’s below the 80% yields that TSMC’s expertise scores, but better than the 40% yields KeyBanc estimates for Samsung. Translation: Intel is finally finding its footing in the exceptionally complex foundry game. Consider it a major win for a company that largely missed last decade’s smartphone tsunami, and is now trying its hardest to catch the ride-or-die AI wave.

Perhaps not-so-coincidentally, Intel is suddenly racking up a client list of heavy hitters:

• According to Vinh, hyperscalers, including Amazon Web Services and Meta, are now all evaluating Intel’s chip package for custom chip projects. Apple, meanwhile, has already tapped the company’s 18A process node for lower-end chips in MacBooks and iPads, and is considering Intel chips for future iPhones.
• In fact, according to Vinh, Intel is already nearly sold out of its server central processing units for the year; that could allow the company to increase prices for the units by as much as 15% this year. According to S&P Global Market Intelligence data, Intel’s Data Center and Artificial Intelligence unit is currently its third-largest in terms of revenue but second most profitable.

Made In America: The progress has earned Intel praise from one particularly important member of the audience: President Trump, who last year attempted to oust new CEO and longtime chip industry veteran Lip-Bu Tan, before changing his tune and leading the government to take a 10% stake in the chipmaker. “The United States government is proud to be a shareholder of Intel … Our country is determined to bring leading-edge chip manufacturing back to America, and that is exactly what is happening,” the president said in a Truth Social post this week. Speaking of Made in America: The Wall Street Journal this week reported that TSMC may soon significantly expand its operations in Phoenix, Arizona, where it opened a chip foundry in 2024.