Intel's foundry gains credibility this week
- Intel’s April 23 earnings call put fresh numbers behind its foundry push, with Chief Executive Lip-Bu Tan saying Intel 18A products are ramping in full volume. - Intel Foundry posted $5.4 billion in first-quarter revenue, up 20% sequentially, while its operating loss narrowed to $2.4 billion on better yields. - Analysts are treating 18A and 14A as proof of execution, not proof of parity with Taiwan Semiconductor Manufacturing. (intc.com)
Intel used its April 23 earnings call to show that its foundry story now has real production data behind it. Lip-Bu Tan said Intel 18A-based Core Series 3 products are in full volume ramp. (intc.com) (download.intel.com) That matters because Intel is trying to do two jobs at once: design its own chips and sell factory capacity to others. The pitch only works if new manufacturing nodes arrive on time and at usable yields. (download.intel.com) (intc.com) Intel said first-quarter revenue reached $13.6 billion, up 7% from a year earlier, and non-GAAP gross margin rose to 41.0%. The company guided second-quarter revenue to $13.8 billion to $14.8 billion. (intc.com) Inside that report, Intel Foundry generated $5.4 billion in revenue, up 20% sequentially, with external foundry revenue at $174 million. Its operating loss improved by $72 million from the prior quarter to $2.4 billion. (finance.yahoo.com) (seekingalpha.com) Tan and Chief Financial Officer David Zinsner tied that improvement to manufacturing basics: more good chips per wafer and better output on older and newer nodes. Intel said yields improved across Intel 4, Intel 3, and 18A. (download.intel.com) (techpowerup.com) The next node, 14A, is part of why analysts moved this week. On the earnings call, Intel said 14A “maturity, yield and performance” are outpacing 18A at the same stage, and multiple customers are evaluating the process design kit, the software rules customers need before they commit a chip design to a factory. (finance.yahoo.com) (fortune.com) That does not mean Intel has solved the economics of contract manufacturing. Foundry losses are still measured in billions, and Intel said part of the quarter’s spending increase came from an intentional step-up in 14A investment to support internal and external evaluations. (finance.yahoo.com) (intc.com) Intel is also leaning on packaging, the step that connects chip pieces into a finished product, as a second proof point. Zinsner said advanced packaging demand reached “billions of dollars per year,” and Intel said it expanded assembly and test capacity in Penang, Malaysia. (fool.com) (intc.com) Wall Street’s tone shifted after the report. Post-earnings coverage pointed to analyst upgrades and higher price targets, with firms citing stronger server demand, AI-related CPU demand, and evidence that Intel’s manufacturing roadmap is executing better than expected. (thestreet.com) (in.investing.com) The caution is simpler than the hype: Intel has made its foundry plan more believable, but the outside-customer business is still small and the factory build-out is still expensive. This week’s update gave investors evidence of progress, not an end point. (intc.com) (seekingalpha.com)
