Intel's CEO, Chen Liwu, stated in an interview on Monday local time that the company's external foundry business is steadily advancing, becoming a crucial component of its turnaround strategy.
"The foundry business is extremely important," Chen Liwu remarked, "it is one of the significant national assets."
Intel's foundry operations, also known as wafer fabrication, represent one of the most expensive and critical elements of the company's revival plan. It aims to produce semiconductors for external clients while aiding in the restoration of advanced chip manufacturing capabilities in the United States. Historically, Intel's facilities exclusively manufactured chips for its own use in personal computers and data center servers. Chen Liwu's predecessor, Pat Gelsinger, vigorously pursued the costly external foundry strategy.
Since Chen Liwu's appointment as CEO in March 2025, Intel's stock price has surged over 300%, with investors betting that this seasoned semiconductor industry executive can reverse the company's prolonged downturn. A key question is whether Chen Liwu can achieve Intel's foundry objectives, enabling its manufacturing capabilities to compete with companies like Taiwan Semiconductor Manufacturing (TSM).
Chen Liwu indicated on Monday that the company is making tangible progress toward this goal.
He specifically highlighted improvements in Intel's advanced 18A manufacturing process, which investors have closely monitored as a critical test of the company's recovery. Chen Liwu noted that the 18A process was "not ideal" when he assumed leadership.
"Now I see its progress," he stated.
Manufacturing yield, the percentage of usable chips produced per wafer, is a key metric for the profitability and customer confidence of a foundry business. Chen Liwu said Intel's advancements have exceeded expectations.
"The best practice is to increase yield by 7% or 8% monthly, and now I am witnessing that," he explained.
Chen Liwu mentioned that these developments are beginning to attract customer interest. As Intel's manufacturing capabilities improve, more potential clients are proactively reaching out, expressing a desire to utilize its foundry services.
Earlier this month, reports surfaced that Intel and Apple had reached a preliminary agreement for Intel to produce some Apple chips currently manufactured by Taiwan Semiconductor Manufacturing (TSM). When asked about this during Monday's interview, Chen Liwu declined to name specific clients.
However, Chen Liwu stated that Intel anticipates securing commitments from multiple foundry clients in the second half of the year. "Several clients are collaborating with us," he said, "and we look forward to serving them."
These comments align with previous statements made by Intel executives to investors. During the company's earnings call in April, Chief Financial Officer David Zinsner indicated that Intel expects "more definitive signals" from external foundry clients in the latter half of the year and into early 2027.
Beyond Intel's own recovery, Chen Liwu emphasized the strategic importance of the foundry business for the U.S. semiconductor supply chain. Intel has established a new facility in Arizona utilizing the 18A process, while another project in Ohio has faced significant delays, with operations not expected to commence until at least 2030.
"Currently, over 90% of the most advanced processors are manufactured overseas," he noted, "so I believe it is crucial to relocate part of that production back to the domestic market."
Looking ahead, Chen Liwu expressed that Intel's next-generation 14A process could eventually compete with Taiwan Semiconductor Manufacturing (TSM), widely regarded as the leading third-party chip manufacturer.
"It will align with TSMC's process timeline," he said. "This will represent a significant breakthrough."
Comments