Intel CEO says foundry business is gaining momentum as customer interest grows
Intel The company’s foreign manufacturing business is gaining momentum and emerging as a key part of the chipmaker’s turnaround, CEO Lip-Bu Tan said on Monday.
“The casting business is very important,” Tan told Jim Cramer on CNBC’s “Mad Money.” “This is one of the most important national treasures.”
Intel’s manufacturing business, known as foundry, is one of the most expensive and important parts of the company’s revitalization strategy. It was designed to produce semiconductors for customers outside while helping rebuild advanced chip manufacturing capacity in the U.S. after years of overseas dominance. In the past, Intel’s factories only produced its own chips used in personal computers and data center servers. Tan’s predecessor, Pat Gelsinger, defended the expensive foreign foundry strategy.
Shares of Intel have risen more than 300% since Tan was appointed CEO in March 2025, as investors bet that longtime semiconductor executive Tan would stabilize the struggling chipmaker after years of disruption. One of the biggest questions was whether Tan could realize Intel’s foundry ambitions by making its manufacturing capabilities competitive with its peers. Taiwan Semiconductor Manufacturing Inc..
Tan said that the company has started to make concrete progress towards this goal.
Tan particularly noted developments in Intel’s advanced 18A manufacturing process, which were closely watched by investors as an important test of the return. He said the 18A process was “not good” when he took over.
“I see it now,” said Tan, who led chip design software maker Cadence Design Systems from 2009 to 2021 and has a two-year term on Intel’s board that ends in 2024.
Production yield, the percentage of usable chips produced from each plate, is a critical metric for profitability and customer confidence in the foundry business. Tan said Intel’s progress has exceeded expectations.
“The best practice is to see a 7% or 8% yield increase per month, and that’s what I’m seeing now,” he said.
According to Tan, the improvements are starting to attract customers’ attention. As Intel’s manufacturing performance improves, more potential customers are approaching the company about using its foundry business, he said.
On May 8, The Wall Street Journal reported It was stated that Intel and Apple have reached a preliminary agreement for Intel to produce some Apple chips currently produced by TSMC. When Cramer asked Tan about these reports, the CEO refused to discuss customers by name.
However, Tan said Intel expects commitments from multiple foundry customers in the second half of the year. “Multiple clients are working with us,” he said. “We look forward to serving them.”
The comments align with what Intel executives have previously told investors. Intel expects signals from external foundry customers to be “more concrete” in the second half of the year and early 2027, CFO David Zinsner said on the company’s April earnings call.
Beyond Intel’s turnaround, the foundry business is strategically important to the U.S. semiconductor supply chain, Tan said. While Intel is building a new facility in Arizona using the 18A process, a separate project in Ohio has experienced major delays and is not scheduled to begin production until at least 2030.
“More than 90 percent of the most advanced processors are produced outside the country,” he said. “That’s why I think it’s important to bring some of them back.”
Going forward, Tan said Intel’s next-generation 14A process could eventually compete with TSMC, which is considered a leading third-party chipmaker.
“It will happen at the same time as TSMC,” he said. “This is a huge breakthrough.”
