Intel Considers Abandoning 18A Chip Process, Shifting Focus to 14A in Bid to Win Major Customers

Intel might axe the 18A process node for foundry customers, essentially leaving TSMC with no rival -- Intel reportedly to focus on 14A

Lip-Bu Tan, the chief executive of Intel, is considering stopping the promotion of the company's 18A fabrication technology (1.8nm-class) to foundry customers, instead shifting the company's efforts to its next-generation 14A manufacturing process (1.4nm-class) in a bid to secure orders from large customers like Apple or Nvidia, reports Reuters. If this shift in focus occurs, it would be the second node in a row that Intel has deprioritized. The proposed adjustment could result in major financial consequences and alter the trajectory of Intel's foundry operations, as it will effectively withdraw the company from the foundry market for several years. After taking the helm in March, Lip-Bu Tan announced intentions to cut costs in April, which is expected to involve layoffs and the cancellation of certain projects. According to the new report, by June, he began sharing with colleagues that the 18A manufacturing process -- a technology designed to showcase Intel's manufacturing prowess -- was losing appeal to outside customers, which is why he believed it made sense for the company to shift away from offering 18A and its performance-enhanced 18A-P version to foundry customers. Instead, Lip-Bu Tan proposed directing more resources to the completion and promotion of 14A, the company's next-generation node, which will be ready for risk production in 2027 and for volume production in 2028. Given the timing of 14A, it is now time to start promoting it among potential third-party Intel Foundry clients. Intel's 18A fabrication technology is the company's first node to utilize its 2nd-generation RibbonFET gate-all-around (GAA) transistors, along with a PowerVia backside power delivery network (BSPDN). By contrast, 14A utilizes RibbonFET 2 transistors, PowerDirect BSPDN, which delivers power directly to each transistor's source and drain through specialized contacts, and features Turbo Cells for critical paths. In addition, 18A is Intel's first leading-edge technology that is compatible with third-party design tools and can be used by its foundry customers. Dropping external sales of 18A and 18A-P would require Intel to account for a substantial write-off reflecting the billions it spent developing the manufacturing technologies, according to individuals familiar with internal deliberations cited by Reuters. Depending on how you count development costs, the resulting charge could total hundreds of millions or even billions of dollars. Both RibbonFET and PowerVia were initially developed for 20A, but that technology was cancelled for internal products last August in a bid to focus on 18A for both internal and external products. Intel's rationale behind the move may be rather simple. By limiting the number of potential customers for 18A, the company may potentially cut its operating costs. The majority of tools required for 20A, 18A, and 14A (except for High-NA EUV equipment) are already in place at its Fab D1D in Oregon, as well as at Fabs 52 and 62 in Arizona. However, once these tools are formally put into operation, the company will have to report their depreciation as a cost. Not putting them online potentially enables Intel to cut its costs amid uncertainties with orders from third-party clients. In addition, by not offering 18A and 18A-P to external customers, Intel may save money on engineers dedicated to supporting the sampling, ramp, and mass production of third-party circuits at Intel fabs. Obviously, this is speculation on our side. However, by ceasing to offer 18A and 18A-P to external clients, Intel will be unable to demonstrate advantages of its fabrication nodes to a broad range of customers with various designs, which would leave them with a single choice for next two or three years: go with TSMC and use N2, N2P, or even A16. Although Samsung is set to formally start making chips on its SF2 (also known as SF3P) node later this year, that node is expected to be behind Intel 18A and TSMC's N2 and A16 in terms of power, performance, and area. Essentially, Intel would not be showing up to its fight against TSMC's N2 and A16, which will certainly not help to gain the confidence of potential clients towards other Intel offerings, namely 14A, 3-T/3-E, Intel/UMC 12nm, and others. Reuters' sources familiar with the matter explained that Lip-Bu Tan had asked Intel's specialists to prepare proposals for discussion with Intel's board this fall. Options could include ceasing efforts to sign up new clients for 18A, though given the scale and complexity of the issue, the decision might not be finalized until the board meets again later this year. Intel itself reportedly declined to discuss hypothetical scenarios but confirmed that the main customer for 18A has always been its own Products division, which plans to begin producing codenamed Panther Lake CPUs for laptops in 2025 using this technology. Eventually, 18A and 18A-P will be adopted by Clearwater Forest, Diamond Rapids, and Jaguar Shores products. Intel's push to attract large-scale external clients to its Intel Foundry fabs remains critical to its turnaround, as only with high volumes the company will be able to pay off for its process technologies that cost billions to develop. However, in addition to Intel itself, only Amazon, Microsoft, and the U.S. Department of Defence have formally confirmed plans to use 18A. While Broadcom and Nvidia are also reportedly testing Intel's latest process technology, they have yet to commit to using it for actual products. Intel's 18A has one key advantage over TSMC's N2: it features backside power delivery, which is particularly useful for power-hungry processors aimed at AI and HPC applications. TSMC's A16 with Super Power Rail (SPR) will only enter mass production in late 2026, so 18A will maintain the advantage of offering backside power delivery for Amazon, Microsoft, and potentially other customers for a while. However, N2 is expected to offer higher transistor density, which is beneficial for the vast majority of chip designs. Furthermore, while Intel has been running Panther Lake silicon at its D1D fab for quarters (so, currently Intel is still in risk production using 18A), the company's high-volume Fab 52 and Fab 62 started to run 18A test silicon this March, so they will start producing commercial chips only late in 2025, or rather in early 2025. Intel's external customers are, of course, interested in producing their designs at high-volume fabs in Arizona rather than at development fabs in Oregon. Intel CEO Lip-Bu Tan is reportedly considering halting the promotion of the company's 18A fabrication process to external clients and instead focusing on the next-generation 14A production node, aiming to attract large customers such as Apple and Nvidia. The move could trigger massive write-offs, as Intel has spent billions developing 18A and 18A-P process technologies. Shifting focus to 14A could help cut costs and better prepare the node and operations for third-party clients, but the move risks undermining customer confidence in Intel's foundry capabilities ahead of 14A's planned production in 2027-2028. While the 18A node remains critical for Intel's own products, such as Panther Lake CPUs, limited demand from third parties -- so far, only Amazon, Microsoft, and the U.S. Department of Defense have confirmed plans to use it -- has raised concerns about its viability. The potential decision -- which will essentially withdraw Intel from the broad foundry market until 14A comes to market -- will be reviewed by Intel's board later this year. Even if Intel eventually chooses to remove 18A from its foundry offerings, aimed at a broad range of applications and clients, the company will still manufacture chips using 18A for its own products, which are already designed for the process. It also intends to fulfill limited orders it has already committed to, including supplying chips for the aforementioned clients.

Report: Intel set to abandon 18A chip manufacturing process - SiliconANGLE

Intel Corp. is set to revamp its contract chip manufacturing business by pivoting away from its highly-publicized 18A process and switching its attention to its next-generation 14A node in an effort to win over new customers. The company's proposed strategic shift was first reported by Reuters and later, the German-language outlet ComputerBase, with both publications citing people familiar with new Chief Executive Lip-Bu Tan's plans. Such a move would represent a significant setback for the troubled chipmaker, and it comes amid a much broader overhaul that began when Tan (pictured) took over the company in March. The new CEO is struggling to reverse Intel's fortunes after it posted a whopping $18.8 billion loss in 2024 by slashing jobs and flattening its corporate structure. According to ComputerBase, the goal is to try and regain leadership in chop manufacturing and better compete with arch-rival Taiwan Semiconductor Manufacturing Co., which recently turned down proposals to create a joint venture with Intel. If Intel does decide to write off the 18A process, it would be seen as a massive blow to Intel's foundry strategy. The node was described as a "generational leap" for the company that would help it to match the capabilities of TSMC. It's the first Intel node to feature technologies such as PowerVia backside power delivery and next-generation RibbonFET transistors - cutting-edge innovations that were pitched as the foundation of Intel's much-vaunted Intel Foundry Services business. But chipmakers have unanimously shunned Intel's latest innovations, and Intel itself is the only relevant customer using the 18A process so far. That's why Tan has reportedly chosen to focus Intel Foundry's efforts entirely on the 14A process, which isn't expected to be ready for mass production until 2027 at the earliest. His decision wouldn't have come lightly, for it would require Intel to write off multiple billion dollar investments in the 18A node, an action that would upset shareholders and reduce future research and development budgets. However, Intel's manufacturing struggles aren't the only problems it faces. Its ambitious plans to construct a new $28 billion chip factory in Ohio have reportedly been pushed back until 2030 at the earliest, casting doubt on its ability to lead a U.S. push to rebuild its domestic semiconductor manufacturing industry. Since taking over in March, Tan has already made a number of drastic changes. In April, he announced a broad overhaul of the chipmaker's corporate structure that includes an unspecified number of job reductions. That move came in the wake of reports that Intel could shed up to 20% of its staff, in addition to an earlier round of 15,000 layoffs that was announced in August 2024. "It's clear to me that organizational complexity and bureaucratic processes have been slowly suffocating the culture of innovation we need to win," Bu-Tan said in a memo to employees announcing the restructuring. In addition, Tan has also reduced the company's operational expenses target by $500 million, while lowering its capital expenditure forecast by $2 billion. By flattening the company's corporate structure, Tan put Data Center and AI and Client Computing business groups under his direct oversight, saying this will help to accelerate decision-making and innovation. "I'm a big believer in the philosophy that the best leaders get the most done with the fewest people," he said at the time. Tan also promoted Sachin Katti to the roles of Chief Technology Officer and Chief AI Officer in order to help focus on the company's overall strategy and try to compete with Nvidia Corp. in the artificial intelligence chip market. These moves were driven by Intel's horrendous losses in fiscal 2024, which was its first annual deficit since 1986. The Intel Foundry business was one of the major reasons for its $18.8 billion net loss, shocking investors. In addition, Intel faces external pressures. Earlier this year, the U.S. government was reportedly pressing hard for Intel to create some kind of joint venture with TSMC, but the Taiwanese chip giant ended months of speculation in April when it explicitly ruled out such a move. "TSMC is not engaged in any discussion with other companies regarding any joint venture, technology licensing or technology," said TSMC CEO C.C. Wei in April, a statement that forces Intel to forge its own path. The decision to abandon the 18A process isn't a complete surprise, as Intel's Chief Executive of Products Michelle Holthaus admitted last month that Intel was considering using its competitors' factories in addition to its own. Discussing the company's upcoming Nova Lake central processing units, she said: "Yes. Of course, I want it to be on an Intel Foundry, but if it doesn't deliver the best product, I'm not going to build it there."

Report: Intel considers moving on from 18A chip manufacturing process - SiliconANGLE

Report: Intel considers moving on from 18A chip manufacturing process Intel Corp. is set to revamp its contract chip manufacturing business by pivoting away from its highly publicized 18A process and switching its attention to its next-generation 14A node in an effort to win over new customers. The company's proposed strategic shift was first reported by Reuters and later, the German-language outlet ComputerBase, with both publications citing people familiar with new Chief Executive Lip-Bu Tan's plans. Such a move would represent a significant setback for the troubled chipmaker, and it comes amid a much broader overhaul that began when Tan (pictured) took over the company in March. The new CEO is struggling to reverse Intel's fortunes, after it posted an $18.8 billion loss in 2024, by slashing jobs and flattening its corporate structure. According to ComputerBase, the goal is to try and regain leadership in chip manufacturing and better compete with arch-rival Taiwan Semiconductor Manufacturing Co., which recently turned down proposals to create a joint venture with Intel. If Intel does decide to write off the 18A process, it would be seen as a massive blow to Intel's foundry strategy. The node was described as a "generational leap" for the company that would help it to match the capabilities of TSMC. It's the first Intel node to feature technologies such as PowerVia backside power delivery and next-generation RibbonFET transistors - cutting-edge innovations that were pitched as the foundation of Intel's much-vaunted Intel Foundry Services business. But chipmakers have unanimously shunned Intel's latest innovations, and Intel itself is the only relevant customer using the 18A process so far. That's why Tan has reportedly chosen to focus Intel Foundry's efforts entirely on the 14A process, which isn't expected to be ready for mass production until 2027 at the earliest. His decision wouldn't have come lightly, for it would require Intel to write off multiple billion-dollar investments in the 18A node, an action that would upset shareholders and reduce future research and development budgets. However, Intel's manufacturing struggles aren't the only problems it faces. Its ambitious plans to construct a new $28 billion chip factory in Ohio have reportedly been pushed back until 2030 at the earliest, casting doubt on its ability to lead a U.S. push to rebuild its domestic semiconductor manufacturing industry. Since taking over in March, Tan has already made a number of drastic changes. In April, he announced a broad overhaul of the chipmaker's corporate structure that includes an unspecified number of job reductions. That move came in the wake of reports that Intel could shed up to 20% of its staff, in addition to an earlier round of 15,000 layoffs that was announced in August 2024. "It's clear to me that organizational complexity and bureaucratic processes have been slowly suffocating the culture of innovation we need to win," Tan said in a memo to employees announcing the restructuring. In addition, Tan has also reduced the company's operational expenses target by $500 million, while lowering its capital expenditure forecast by $2 billion. By flattening the company's corporate structure, Tan put Data Center and AI and Client Computing business groups under his direct oversight, saying this will help to accelerate decision-making and innovation. "I'm a big believer in the philosophy that the best leaders get the most done with the fewest people," he said at the time. Tan also promoted Sachin Katti to chief technology officer and chief AI officer in order to help focus on the company's overall strategy and try to compete with Nvidia Corp. in the artificial intelligence chip market. These moves were driven by Intel's horrendous losses in fiscal 2024, which was its first annual deficit since 1986. The Intel Foundry business was one of the major reasons for its $18.8 billion net loss, shocking investors. In addition, Intel faces external pressures. Earlier this year, the U.S. government was reportedly pressing hard for Intel to create some kind of joint venture with TSMC, but the Taiwanese chip giant ended months of speculation in April when it explicitly ruled out such a move. "TSMC is not engaged in any discussion with other companies regarding any joint venture, technology licensing or technology," said TSMC CEO C.C. Wei in April, a statement that forces Intel to forge its own path. The decision to abandon the 18A process isn't a complete surprise, as CEO of Intel Products Michelle Holthaus admitted last month that Intel was considering using its competitors' factories in addition to its own. Discussing the company's upcoming Nova Lake central processing units, she said: "Yes. Of course, I want it to be on an Intel Foundry, but if it doesn't deliver the best product, I'm not going to build it there."

Intel's new CEO explores big shift in chip manufacturing business

SAN FRANCISCO -- Intel's new chief executive is exploring a big change to its contract manufacturing business to win major customers, two people familiar with the matter told Reuters, in a potentially expensive shift from his predecessor's plans. The new strategy for Intel's foundry business would mean offering outside customers a newer generation of technology, the people said. That next-generation chipmaking process, analysts believe, will be more competitive against Taiwan Semiconductor Manufacturing Co in trying to land major customers such as Apple or Nvidia. Shares of Intel fell as much as five per cent on Wednesday morning on the Nasdaq. Since taking the company's helm in March, CEO Lip-Bu Tan has moved fast to cut costs and find a new path to revive the ailing U.S. chipmaker. By June, he started voicing that a manufacturing process known as 18A, in which prior CEO Pat Gelsinger had invested heavily, was losing its appeal to new customers, said the sources, who spoke on condition of anonymity. To put aside external sales of 18A and its variant 18A-P, manufacturing processes that have cost Intel billions of dollars to develop, the company would have to take a write-off, one of the people familiar with the matter said. Industry analysts contacted by Reuters said such a charge could amount to a loss of hundreds of millions, if not billions, of dollars. Intel declined to comment on such "hypothetical scenarios or market speculation." It said the lead customer for 18A has long been Intel itself, and it aims to ramp production of its "Panther Lake" laptop chips later in 2025, which it called the most advanced processors ever designed and manufactured in the United States. Persuading outside clients to use Intel's factories remains key to its future. As its 18A fabrication process faced delays, rival TSMC's N2 technology has been on track for production. Tan's preliminary answer to this challenge: focus more resources on 14A, a next-generation chipmaking process where Intel expects to have advantages over Taiwan's TSMC, the two sources said. The move is part of a play for big customers like Apple and Nvidia, which currently pay TSMC to manufacture their chips. Tan has tasked the company with teeing up options for discussion with Intel's board when it meets as early as this month, including whether to stop marketing 18A to new clients, one of the two sources said. The board might not reach a decision on 18A until a subsequent autumn meeting in light of the matter's complexity and the enormous money at stake, the person said. Intel declined to comment on what it called rumor. In a statement, it said: "Lip-Bu and the executive team are committed to strengthening our roadmap, building trust with our customers, and improving our financial position for the future. We have identified clear areas of focus and will take actions needed to turn the business around." Last year was Intel's first unprofitable year since 1986. It posted a net loss attributable to the company of US$18.8 billion for 2024. The Intel chief executive's deliberations show the enormous risks - and costs - under consideration to move the storied U.S. chipmaker back onto solid footing. Like Gelsinger, Tan inherited a company that had lost its manufacturing edge and fell behind on crucial technology waves of the past two decades: mobile computing and artificial intelligence. The company is targeting high-volume production later this year for 18A with its internal chips, which are widely expected to arrive ahead of external customer orders. Meanwhile, delivering 14A in time to win major contracts is by no means certain, and Intel could choose to stick with its existing plans for 18A, one of the sources said. Intel is tailoring 14A to key clients' needs to make it successful, the company said. AMAZON AND MICROSOFT ON 18A Tan's review of whether to focus clients on 14A involves the contract chipmaking portion of Intel, or foundry, which makes chips for external customers. Regardless of a board decision, Intel will make chips via 18A in cases where its plans are already in motion, the people familiar with the matter said. This includes using 18A for Intel's in-house chips that it already designed for that manufacturing process, the people said. Intel also will produce a relatively small volume of chips that it has guaranteed for Amazon.com AMZN.O and Microsoft MSFT.O via 18A, with deadlines that make it unrealistic to wait for the development of 14A. Amazon and Microsoft did not immediately comment on the matter. Intel said it will deliver on its customer commitments. Tan's overall strategy for Intel remains nascent. So far, he has updated his leadership team, bringing in new engineering talent, and he has worked to shrink what he considered bloated and slow-moving middle management. Shifting away from selling 18A to foundry customers would represent one of his biggest moves yet. The 18A manufacturing process includes a novel method of delivering energy to chips and a new type of transistor. Together, these enhancements were meant to let Intel match or exceed TSMC's capabilities, Intel executives have previously said. However, according to some industry analysts, the 18A process is roughly equivalent to TSMC's so-called N3 manufacturing technology, which went into high-volume production in late 2022. If Intel follows Tan's lead, the company would focus its foundry employees, design partners and new customers on 14A, where it hopes for a better chance to compete against TSMC. Tan has drawn on extensive contacts and customer relationships built over decades in the chip industry to arrive at his view on 18A, the two sources said.