Intel’s (NASDAQ: INTC) newly appointed CEO, Lip-Bu Tan, is preparing to make a critical strategic shift in the company’s foundry business, potentially pivoting away from the long-touted 18A manufacturing process in favor of a more advanced node 14A, according to two sources cited in a recent Reuters report.
The potential move underscores the immense pressure facing Tan as he tries to revive the U.S. chip giant’s competitiveness in global semiconductor manufacturing. Tan, who assumed leadership in March 2025, is wasting no time cutting costs and reshaping Intel’s future. One of his most consequential decisions may involve de-emphasizing 18A for external foundry clients, despite Intel having already poured billions into its development under former CEO Pat Gelsinger.
While 18A, which includes Intel’s novel RibbonFET transistors and PowerVia backside power delivery, was once touted as a technology that could outmatch TSMC’s process nodes, skepticism has grown about its commercial traction. According to sources familiar with internal discussions, Tan has expressed doubts about 18A’s ability to secure marquee customers like Apple and Nvidia, who remain heavily reliant on TSMC’s N3 and upcoming N2 nodes.
Industry analysts estimate that walking away from 18A for external sales could lead to write-offs in the hundreds of millions. Nevertheless, Tan appears to be betting that a sharper focus on 14A, a next-generation node still in development, might offer a more compelling path for Intel to reassert foundry leadership and court high-profile customers.
While Intel declined to comment on what it called “hypothetical scenarios or market speculation,” the company reiterated that it remains committed to launching Panther Lake, its internal 18A-based laptop chip, later this year. Panther Lake is being positioned as one of the most advanced chips ever manufactured in the U.S., and will mark Intel’s first high-volume 18A deployment.
Crucially, Intel’s current commitments to Amazon and Microsoft will still move forward using 18A, due to tight delivery timelines and pre-existing contracts. However, for future deals and large-scale foundry engagements, Intel may begin steering customers toward 14A instead—a node where Tan believes the company can offer a more differentiated and competitive value proposition against TSMC’s N2.
This potential shift comes as Intel’s Foundry Services (IFS) attempts to reposition itself as a credible alternative to TSMC and Samsung. Yet, Intel’s journey remains uphill. The company posted a $18.8 billion net loss in 2024, its first unprofitable year since 1986, and continues to lag in mobile and AI-era computing platforms. Tan, however, brings a deep Rolodex of relationships and a veteran’s clarity to Intel’s new direction. His recent moves include streamlining middle management, hiring new engineering leadership, and initiating internal reviews to align Intel’s roadmap more closely with customer expectations.
One reason for Tan’s possible shift to 14A is timing. While TSMC’s N2 node is already on track for production, Intel’s 18A has faced repeated delays. Internally, there’s now growing momentum behind the idea that 14A could offer a “cleaner slate” for competitive positioning and customer co-design opportunities. Intel has also indicated that 14A is being tailored to specific client needs, a sign that custom solutions may become core to its new foundry model.
Investors should view this potential pivot as a high-stakes gamble. Tan may be willing to absorb near-term losses from a partial write-off of 18A in exchange for better long-term prospects with 14A. However, execution risk remains high. Should 14A miss deadlines or fail to meet the power and performance metrics needed to lure clients from TSMC, Intel could be left in a strategically weakened position yet again.
The Intel board is expected to review these proposals soon, possibly during meetings this month or later in the fall. While no final decision has been made, sources told Reuters that discussions have intensified and that 18A’s future as a customer-facing product is very much in flux.
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