Intel CEO says foundry business is gaining momentum as customer interest grows

On Monday, Intel's CEO Lip-Bu Tan revealed that the company's external manufacturing division is gaining significant momentum, marking a pivotal aspect of the chipmaker's recovery strategy. Speaking on CNBC's 'Mad Money,' Tan emphasized the critical role of the foundry business, referring to it as 'one of the key national treasures.' Intel's foundry operation is a vital and costly element in the company’s effort to regain its footing in the semiconductor industry. This initiative aims to produce chips for external clients while revitalizing advanced semiconductor manufacturing capabilities within the United States, a response to years of reliance on overseas chip production. Traditionally, Intel’s facilities were dedicated solely to manufacturing its own processors for personal computers and data centers. The visionary behind this ambitious external foundry strategy was Tan's predecessor, Pat Gelsinger. Since Tan took the helm in March 2025, Intel's stock has surged over 300%, as investors are optimistic that his extensive experience in the semiconductor field will help stabilize the company after a period of challenges. A significant concern has been whether Tan could elevate Intel's manufacturing capabilities to compete with industry giants like Taiwan Semiconductor Manufacturing Co. (TSMC). Tan indicated that progress is indeed being made, particularly with improvements in Intel's advanced 18A manufacturing process—a key benchmark for investors tracking the company’s turnaround. He noted that when he assumed leadership, the 18A process was lacking, but he is now observing marked enhancements. Manufacturing yield—the ratio of usable chips from each production wafer—is critical for both profitability and customer trust in Intel's foundry services. Tan reported that Intel's advancements have surpassed expectations, with yield improvements reaching 7% to 8% monthly, a standard benchmark in the industry. This positive trajectory is beginning to attract interest from potential clients. In a recent report, the Wall Street Journal disclosed that Intel and Apple have entered preliminary discussions for Intel to produce certain chips for Apple, which are currently made by TSMC. While Tan refrained from naming specific customers during his interview, he expressed confidence that Intel anticipates securing commitments from various foundry clients in the latter half of the year. 'Multiple customers are working with us,' he stated, expressing enthusiasm about the future collaborations. Beyond its corporate revival, Tan also highlighted the strategic importance of the foundry business for the U.S. semiconductor supply chain. Intel is currently constructing a state-of-the-art plant in Arizona utilizing the 18A process, while a separate facility in Ohio has encountered significant delays and won't commence production until at least 2030. Tan pointed out that over 90% of the most advanced processors are currently manufactured outside the U.S., reinforcing the necessity of bringing some production back to American soil. Looking to the future, Tan conveyed optimism about Intel’s forthcoming 14A process, which he believes could rival TSMC's offerings. 'It will be at the same time as TSMC; that is a major, major breakthrough,' he concluded, underscoring the ambitious trajectory Intel is pursuing in the semiconductor landscape.