Intel Bets Big on Foundry Business with 18A Process Rollout

Intel focuses on transforming its foundry sector with significant investments. The company aims to rival TSMC and Samsung with its new 18A process technology while addressing past challenges. Uncertainty remains as the stock struggles. Investors watch closely.

Date: 14-05-2025

AI Rating: 6

Intel’s Foundry Transformation
Intel is strategically pivoting towards its foundry business, having invested $95 billion over the past four years. The ambitious plan aims to compete with industry giants like TSMC and Samsung, though skepticism has surfaced among investors, leading to a 40% drop in stock value since early 2024.

18A Process: Turning Point?
The introduction of Intel's 18A manufacturing process, using a 1.8-nanometer node, is expected to be pivotal for its foundry vision. While currently in risk production, the technology showcases advanced attributes expected to enhance performance and efficiency, particularly crucial in AI and computing workloads. If successful, this new process could significantly affect revenue growth and profit margins.

Despite losses in the foundry business—recording nearly $13 billion last year—there are optimistic signs ahead. With the 18A process entering the manufacturing phase later this year, there’s potential for Intel to capture more market share and customers if it meets or exceeds expectations compared to TSMC's offerings. However, challenges remain, especially concerning the density and cost of chips produced by competitors.

Another promising development hinges on Intel's plans for the advanced 18A-PT version, which may allow for chiplet designs with improved density and efficiency. Additionally, Intel's focus on domestic chip production aligns with U.S. government initiatives to enhance national semiconductor manufacturing capabilities, posing unique advantages for stakeholders.

Market Outlook and Stock Valuation
Intel's stock has exhibited extreme volatility, with returns fluctuating widely over recent years. Currently trading at less than 25 times estimated 2026 earnings appears reasonable, yet ongoing losses from other markets cast a shadow on its potential recovery. Despite possible growth through its foundry efforts, there’s inherent risk due to diminishing market shares in the CPU segment and competition from AMD.

As the foundry business ramps up operations, success could translate into meaningful upward movement in stock prices, warranting close surveillance from investors. Analyzing market performance, a valuation of around $25 per share suggests a 17% upside potential from current prices, assuming execution is successful on these strategic initiatives.

Stocks: INTC