Intel has been in a turbulent period for some time now, and we expect the company’s strategy for the future to be unveiled in the next few days. We already know that the company is looking to reduce its operating costs by employing unfortunately classic recipes: redundancies, lower marketing budgets and asset disposals. But all this says nothing about the company’s strategy for the coming years. A few days ago, a rumour even suggested that the future of Intel Foundry was at risk. It should be remembered that the relaunch of IFS is at the very heart of Pat Gelsinger’s project. In fact, this is where all the American giant’s expenditure is concentrated, thereby drying up its finances.
Intel could entrust all its chips to TSMC
We have learned that the latest wave of redundancies announced (15% of the total workforce) will not be concentrated on intermediate and marketing positions, but essentially on the foundry and chip manufacturing activities. This disturbing information opens the door to a number of speculations, since at the same time we learned that Intel was cancelling its 20A process to concentrate on the highly promising 18A. The icing on the cake is that Broadcom is concerned about the feasibility of the Intel 18A and has concluded that it is not currently suitable for mass production. Some have therefore taken a strange shortcut to imagine a complete dismantling of Intel. On the one hand, there has been talk of shutting down the foundries, while on the other, the PC chip design business has been sold off (with a rumoured interest from Qualcomm).
Lunar Lake and Arrow Lake 100% TSMC inside
In short, as you can see, it is going in all directions. Without holding any secret informations, it seems to us that another path is taking shape. The forced march towards 18A means that Intel wants to get this process up and running quickly, because it has the customers for it. The completion of these contracts will immediately reduce the stock market pressure on the company. At the same time, the transformation of Intel’s capacities towards these new processes means that the company is in difficulty in producing its own products. Lunar Lake is the first 100% “TSMC inside” Intel processor. It will be the same with Arrow Lake. This is a situation that suits Intel well, since paradoxically it allows the company to restore margins while continuing to showcase its expertise (and Lunar Lake is proof of this). so 2025 is a crucial target for Intel. On paper, the Blues have an advantage over TSMC in terms of production nodes (the 18A). But their Achilles heel is production capacity. De-bottlenecking production capacity in order to continue accelerating on IFS seems to be Intel’s only viable option… unless shareholder pressure becomes too great.