What’s happening inside Intel?
Intel’s woes have continued this week, after its CEO met with US president Donald Trump.
Trump beforehand referred to as for the resignation of its CEO, Lip-Bu Tan, following on from a letter despatched by Arkansas senator Tom Cotton to Intel’s board of administrators chairman, Frank Yeary.
Within the letter, Cotton expressed concern over Tan’s investments and ties to semiconductor corporations which can be reportedly linked to the Chinese language Communist Celebration and the Folks’s Liberation Military.
This led to a Trump submit on Fact Social stating: “The CEO of Intel is extremely conflicted and should resign instantly. There isn’t a different answer to this downside.”
However on August 11, the US administration had what Intel described as “a candid and constructive dialogue” on the corporate’s dedication to strengthening US know-how and manufacturing management.
“We respect the President’s robust management to advance these vital priorities and sit up for working intently with him and his administration as we restore this nice American firm,” Intel mentioned after the assembly.
Nevertheless, though Intel has publicly mentioned its board of administrators, and CEO Tan, are “deeply dedicated to advancing US nationwide and financial safety pursuits and are aligned with the Trump’s America First agenda”, former Intel chief Craig Barrett believes Tan’s enterprise technique is not going to raise Intel’s enterprise outlook.
Foundry loss
In February 2024, the corporate unveiled its foundry enterprise, which produces semiconductors for exterior clients equivalent to Microsoft. On the time, Microsoft chairman and CEO Satya Nadella mentioned Microsoft had chosen a chip design it deliberate to supply on the Intel 18A (1.8nm) course of.
“We’re within the midst of a really thrilling platform shift that can essentially remodel productiveness for each particular person group and all the business,” he mentioned. “To attain this imaginative and prescient, we’d like a dependable provide of essentially the most superior, high-performance and high-quality semiconductors. That’s why we’re so excited to work with Intel Foundry, and why we have now chosen a chip design that we plan to supply on Intel 18A course of.”
Throughout the firm’s second quarter of 2025 earnings name, Tan introduced the corporate would now not be creating manufacturing in Germany and Poland, and would “gradual the tempo of development” in Ohio. “We’ll develop our capability primarily based solely on the amount commitments and deploy CapEx in lockstep with the tangible milestones and never earlier than,” he mentioned.
In a letter despatched to Intel workers, Tan mentioned the corporate would cut back the workforce by 15% to 75,000 folks.
On the subject of the Intel foundry enterprise, he wrote: “Going ahead, our funding in Intel 14A might be primarily based on confirmed buyer commitments. There are not any extra clean cheques. Each funding should make financial sense. We’ll construct what our clients want, once they want it, and earn their belief via constant execution.”
Though the chipmaker has invested billions of {dollars} in home US semiconductor analysis, and growth and manufacturing, together with a brand new manufacturing facility in Arizona, Barrett questioned Intel’s funding selections. In an article he wrote for Fortune, Barrett referred to as Tan’s technique of not investing in new know-how – equivalent to the following iterations of its semiconductor manufacturing, the Intel 14A (1.4 nm) course of – till buyer sign-up “a joke”.
Fund Intel
Barrett referred to as on Intel’s clients equivalent to Nvidia, Apple and Google, which primarily use TSMC to fabricate their semiconductors, to think about the significance of building a second supply. He went on to counsel that Intel’s eight fundamental clients ought to every cough up $5bn to fund the event and deployment of superior manufacturing processes to assist the chipmaker.
The brand new chip manufacturing course of has caught the eye of some business watchers who consider it might present a approach for Intel to win enterprise from TSMC, equivalent to within the manufacturing of the following technology of Apple M silicon and a few Nvidia graphics processing items.
The corporate’s roadmap reveals that Intel 14A might be accessible within the first half of 2026, and business stories counsel that semiconductors made on the 14A course of ought to begin transport in 2027.
