Contract chipmakers typically discuss upcoming process nodes with customers before capacity exists and add capacity only after early adopters commit. At Intel, this model is different because the Products Group is the main customer, so capacity is built first to meet internal demand. This is especially critical for leading-edge fabs like those for Intel 14A, which require both Low-NA and High-NA EUV tools and other costly equipment. Given the enormous capital expense, foundries cannot afford idle assets, and normally ramp capacity only when utilization is well above 80% is guaranteed.
But offering a process node without available capacity to external customers risks undermining Intel's foundry ambitions. Competitors such as TSMC and Samsung Foundry typically expand fabs with multiple anchor customers already committed and expect additional demand to follow. Since advanced tools like EUV scanners have long lead times, Intel could miss key foundry opportunities if it cannot provide capacity for third-party clients on time.
Follow Tom's Hardware on Google News , or add us as a preferred source , to get our latest news, analysis, & reviews in your feeds.
Anton Shilov Social Links Navigation Contributing Writer Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
JamesJones44 Seems to contradict what Tan said previously about not investing in further processes if they can't get customers. However, there could be some between the lines going on here, but I don't want to speculate for various reasons. Reply
Gururu "Looking further ahead, we’re developing Intel14A as a foundry node from the ground up in close partnership with large external customers. This is essential to designing a process that meets specific customer requirements and enables us to address a broader segment of the market. Going forward, our investment in Intel 14A will be based on confirmed customer commitments. " Maybe they got some commitments, or just riding high on Panther right now. Reply
thestryker The real question I have is the fab strategy as not investing in finishing the fabs means they don't have as quick a turnaround for expansion. It does sound like there's plenty of space at Fab 52, but all of the High-NA machines they've gotten thus far are installed in Oregon. They can't afford to tie up Oregon to make volume production for long term so I'm hoping the next ones are installed in one of the two Arizona fabs. This would at least indicate they do have a large enough customer for volume production. The other variable of course is ASML's turnaround on EUV machines. Intel may not be able to get High-NA machines fast enough to absorb multiple high volume customers. It still seems to me that Gelsinger's "if you build it they will come" was the right way to approach the fab space. That, however, is long term thinking which wall street is allergic to so I understand why it didn't fly. Reply
TerryLaze thestryker said: It still seems to me that Gelsinger's "if you build it they will come" was the right way to approach the fab space. That, however, is long term thinking which wall street is allergic to so I understand why it didn't fly. It also didn't fly because intel doesn't have infinite money. They can't build up all the FABs they want to and then have them just sit there eating up money until maybe they get customers, they had to draw the line at some point. If they have enough space for their own products then that will not only give them enough money for further expansion but also be a showcase for possible customers. Reply
shady28 I still think Intel should just focus on 18A now that they're there. Evolutionary incremental advancements. N2 / 18A are likely to be the cornerstones of everything for the next 3-5 years and I have a suspicion for much longer than that. The combination of cost getting on the upswing of a parabolic curve while performance improvements become increasingly minor is not something to look forward to. Reply
thestryker TerryLaze said: They can't build up all the FABs they want to and then have them just sit there eating up money until maybe they get customers, they had to draw the line at some point. This isn't what happened though. They canceled everything that wasn't already being built and slowed down construction on everything being built other than Fab 52. The only thing Gelsinger put forth that is likely to happen is the Ohio fab and that's been delayed by at least 5 years. Reply
thestryker shady28 said: I still think Intel should just focus on 18A now that they're there. Evolutionary incremental advancements. N2 / 18A are likely to be the cornerstones of everything for the next 3-5 years and I have a suspicion for much longer than that. Intel isn't retiring any of their EUV nodes that utilize industry standard PDKs any time soon (Intel 4 is done with MTL EOL, and 20A never happened everything else is staying). That means 14A will be it's own thing while they also further develop 18A. There's 18A-P which should be some time this year (unsure about productization timeline) which has updated GAAFET and BSPDN. Then there's also 18A-PT with TSV optimization to follow on from 3-T. This is the biggest change for the company over where it used to be. There won't be retiring of these nodes since they're still volume viable, but they do need to continue advancing if they're actually going to be in competition for high margin fab business. Reply
EzzyB While 18A will be used by Intel itself as well as by Microsoft and the U.S. Department of Defense, only Intel will consume significant volumes. I read somewhere… hmm started with a T? T O T O M'S Something like that. Anyways it talked about Intel building something for some company….. Apple that was it. M series chips on something called 18A. We read it here first… Did we not? Reply
dalek1234 Intel had a great track record of talking. Reply
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/semiconductors/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/semiconductors/intel-is-going-big-time-into-14a-says-ceo-lip-bu-tan-serve-the-customer-well-remark-hints-at-external-client#main
- https://www.tomshardware.com
- AMD claims Panther Lake has 'too much baggage' for handheld PC use — fights back after Intel jabs AMD for using 'ancient silicon' in its Z2 series APUs
- Beijing tells companies to pause H200 purchases — China govt deliberating terms for letting local tech companies buy US chips while still growing homegrown semi
- Intel is 'going big time into 14A,' says CEO Lip-Bu Tan — 'serve the customer well' remark hints at external client
- MSI unlocks the full power of AMD CPUs with new MEG X870E Unify-X Max motherboard — premium Ryzen overclocking comes to AM5
- GeForce NOW Rings In 2026 With 14 New Games in January
Informational only. No financial advice. Do your own research.