Intel Faces Limited External Commitments for Advanced Chip Manufacturing

Intel's ambition to become a major contract chip manufacturer is facing significant hurdles, as the volume of processors committed by external customers for its upcoming 18A and 14A manufacturing technologies remains "not significant," according to CFO David Zinsner. While companies like Nvidia and Broadcom are conducting test runs on Intel's new processes, these trials have yet to translate into substantial long-term contracts. Intel's foundry division reported $4.7 billion in revenue for the March quarter, a 7% increase year-over-year, but most sales still come from internal chip production rather than external clients. The foundry business aims to break even by 2027, requiring low to mid-single digit billions in revenue from outside customers to reach that goal. New CEO Lip-Bu Tan is maintaining Intel's dual strategy of producing chips both for its own use and for third parties, while streamlining operations by divesting non-core assets. The company's ability to secure larger commitments from external customers will be critical to its success in reshaping its role in the global semiconductor supply chain amid ongoing industry challenges.