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Intel is currently undergoing a wave of layoffs and internal restructuring in an effort to cut costs and navigate ongoing challenges. Despite multiple rounds of workforce reductions, the downsizing has yet to conclude—reaching even into its engineering teams.
Alongside these layoffs, Intel is reevaluating its core business operations. The most capital-intensive among them is its semiconductor foundry division, once championed by former CEO Pat Gelsinger. At the time, Intel aspired to rival TSMC by offering chip manufacturing services to external clients, thereby increasing its market share.
However, in the realm of semiconductor process technology, TSMC continues to outpace its competitors with superior capabilities. While Intel’s 18A process has made notable progress—surpassing Samsung in yield rate—it still trails TSMC’s cutting-edge N2 node.
Overall, Intel remains uncertain about the long-term viability of its foundry ambitions, primarily due to two pressing factors: a growing number of companies continue to favor TSMC as their manufacturing partner, making it increasingly difficult for Intel to secure orders; and despite substantial early-stage investments, the foundry division has yet to reverse its downward trajectory. Whether to continue investing or to cut losses remains a deeply complex dilemma.
In a recent 10-Q filing with regulators, Intel candidly acknowledged that if external demand for its 14A and 18A nodes fails to meet expectations, the company will not hesitate to withdraw from the market for advanced process technologies.
Of course, Intel’s in-house chips will continue to evolve and adopt newer process nodes. However, in the absence of sufficient third-party orders, the company may cease contract manufacturing on its 14A/18A platforms, as continued investment in such a scenario would be economically unjustifiable.
Looking ahead, TSMC is expected to maintain its dominance in advanced process manufacturing, with the majority of leading-edge foundry orders split between TSMC and Samsung. Intel, by contrast, may likely retreat from the forefront of advanced contract manufacturing as part of its broader cost-cutting strategy.
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