Intel’s chip manufacturing unit, Foundry Services (IFS), is facing significant challenges in fiscal 2025. The company’s revenues from this unit are a full 1,000 times lower than those achieved by its Taiwan-based rival, TSMC.
Intel’s chip manufacturing revenue plummets
According to estimates, Intel’s revenue from this unit for the year is only around $120 million. This low revenue clearly demonstrates how far from profitability the unit remains, given Intel’s massive multi-billion-dollar investment in advanced manufacturing technologies like 18A.
Under the leadership of CEO Lip-Bu Tan, Intel is undergoing a comprehensive restructuring process, making significant changes not only to its manufacturing operations but also to other divisions focused on consumer products and artificial intelligence. Despite a general atmosphere of optimism within the company, the IFS unit, in particular, remains far from achieving profitability.
Data shared by SemiAnalysis analyst Sravan Kundojjala reveals the deepening of the competition in the sector, reflecting the revenue gap between TSMC and Intel Foundry. Over the years, TSMC has established itself as a leader in the sector by building a massive production capacity and a large customer base, while Intel has lost significant market share in the process.
However, the company’s hopes in this area haven’t completely faded. Major technology companies such as Tesla, Broadcom, and Microsoft are reportedly showing keen interest in Intel’s upcoming 18A and 14A manufacturing technologies.
This interest could revitalize Intel’s IFS division and give the company a competitive edge against industry leader TSMC. The company’s Panther Lake and Clearwater Forest processor series will be the first products to demonstrate the full potential of 18A technology.
The success or failure of these processors will determine the future of the 14A process. If the expected success of 18A technology is achieved, Intel will continue to compete strongly in the high-end chip manufacturing field. But if the 18A process doesn’t produce the desired results, the possibility of the company withdrawing from this chip production race altogether could be on the table, as CEO Lip-Bu Tan has previously pointed out.
