Tae Kim
AI/Semiconductor Journalist, Author of Key Context
Intel has finally committed to a high-volume ramp of its 14A process in 2028, with 14A risk production for internal products on track for the second half of 2027. Per @BenBajarin's excerpt of the call, management cited growing customer engagement and rising confidence that 14A will be highly competitive on performance, power, density, cost and schedule. x.comÂ
Intel is scaling its foundry turnaround with 18A in high-volume production and yields ahead of plan. Q2 revenue rose 25% to $16.1B, with Panther Lake on 18A. 14A risk production is set for the second half of 2027 and high-volume ramps for 2028, and two prospective 14A customers will decide between the second half of 2026 and the first half of 2027. Capex tops $20B this year and rises sharply in 2027. Nvidia invested $5B and is co-developing custom x86 CPUs; the US government holds 9.9%. x.comÂ
Intel's growing server profit gives its recovery firmer support, though Q4's margin reset limits extrapolation. Data Center and AI revenue rose 78% to $7.3B; foundry losses narrowed to $1.85B but remain substantial. Management guides Q4 non-GAAP gross margin to 38% from 44.1% in Q3, while client sales fell 5%. The 14A milestone alone does not establish external foundry commitments. x.comÂ
Intel's lack of real AI or foundry plans is showing in weak Q4 guidance. It forecasts $15 billion to $16 billion of revenue versus $17.08 billion consensus and non-GAAP EPS of $0.25 versus $0.44, despite Q3 EPS of $0.52 and revenue of $16.51 billion beating expectations. x.comÂ
Intel's foundry may be closer than the market assumes because its UMC 12nm partnership brings external-customer experience and a more customer-friendly design kit. Musk said Terafab plans to use Intel 14A, with Tesla and SpaceX building and running the fabs themselves; that would be an important outside test. Intel still must prove yields, volume and schedules, while Terafab's commercial terms remain unclear. Still bullish, but not enough to add now. x.comÂ
Intel's poor EMIB-T packaging yields threaten its plans for next year. Per a confidential source, yields are very poor, and EMIB-T may now slip into the following year. The 14A PDK 0.9 matters more for the long term. Intel remains a very strong long-term bull case because yields should improve, though setbacks can arise along the way; whether to avoid this near-term risk is a personal judgment. x.com x.com x.com x.com x.com x.comÂ
Intel's heavy capex ramp will pull its stock down. Per @wallstengine, Intel said tooling investment will rise 40% in 2026 versus 2025, focused on Intel 3, 18A and 18A-P, and that investors should expect 2027 capex to increase as well, with 14A volume production committed for 2028. x.comÂ
Intel got to the next wave of chipmaking tools first: High-NA EUV reached its first high-volume production on Intel 18A. ASML's numbers point to a capacity supercycle, probably not a peak, with EUV and DUV capacity each growing about 30% a year for the next two years. That matters because ASML only expands capacity against committed demand, so the whole lithography stack is supply-constrained and building. x.comÂ
Intel's high-NA lead and derisked stitching give its foundry technical reasons for much better returns. Per Intel, high-NA is used on selected layers of a subset of Core Ultra Series 3 processors; 18A D0 is already within high-volume manufacturing range. Stitching has been substantially derisked on XT260 and could be ready for volume production in 2027 at the earliest. The foundry turnaround remains a minority bet, and packaging was an added benefit to the high-NA case. x.comÂ
Intel's turnaround is real, but its valuation already assumes a lot goes right while Foundry has much to prove. Revenue grew 25% to $16.1 billion, data center revenue jumped 59%, and the CEO says Intel can meet only about half of CPU demand, with ASPs up 48%. But Foundry lost $2.1 billion on $5.8 billion of revenue, only $293 million of it external, with no high-volume marquee customer. After a roughly 225% run to $120, Intel is worth about $634 billion, already paying for much of the comeback. … Show more
Intel's near-term growth is constrained by a Kiryat Gat factory blast and memory-driven PC weakness. The weak Q4 outlook calls for answers: the blast looks set to cut roughly $300 million of revenue in Q4 and could have a similar impact in Q1, limiting data-center growth. Fab ownership gives Intel pricing power and enterprise demand is strong; external foundry customers would add another tailwind if won. CEO Lip-Bu Tan said Nova Lake will allow Intel to take back share. x.com x.com x.com x.com … Show more
