During his nearly four years at the helm of Intel, Pat Gelsinger emphasized the significance of semiconductor manufacturing for the company. His focus on enhancing Intel’s competitiveness in a sector dominated by Taiwan’s TSMC was evident in many of his decisions. However, persistent manufacturing delays, substantial financial losses, and a significant decline in the company’s stock market value eventually led to his departure.
In March 2025, Lip-Bu Tan took over as CEO amidst an uncertain future for Intel, where the role of its chip factories was unclear. Rumors even suggested that Tan might consider spinning off semiconductor production into an independent entity, indicating a potential abandonment of Intel’s traditional manufacturing roots.
Fast forward fourteen months into Tan’s leadership, and the narrative has dramatically shifted. Intel’s manufacturing plants have regained a pivotal role in the company’s strategic framework. On a recent episode of CNBC’s Mad Money, Tan unequivocally confirmed his intention to position Intel as the Western counterpart to TSMC. The development of cutting-edge nodes and collaborations with major players like Apple are central to this ambitious objective.
Node 18A: Intel’s Competitive Edge
The heart of Intel’s strategy lies in its 18A lithography technology, which is currently its most advanced technology in mass production. This node is theoretically comparable or even marginally superior to TSMC’s 2nm technology. When Tan assumed leadership, the performance of the 18A node was subpar, prompting him to seek assistance from partners within the semiconductor manufacturing ecosystem to analyze and optimize production processes, thereby enhancing competitiveness.
A noteworthy aspect of Intel’s manufacturing is its “performance,” which assesses the percentage of functional chips produced. Poor performance results in millions in losses. Recently, Tan noted that industry standards require a 7 to 8% improvement in performance each month, and Intel has begun achieving these targets, demonstrating a positive shift in the company’s trajectory.
This resurgence in performance has attracted notable clientele. Agreements have already been secured with companies like Tesla and Google for chip manufacturing. Furthermore, Apple is considering collaborations with both Intel and Samsung to produce advanced chips in the U.S. This strategic shift can be attributed to Apple’s diminishing prioritization within TSMC’s production pipeline—now a privilege held by Nvidia.
Apple’s interest in having its chips manufactured in the U.S. by Intel or Samsung serves several purposes. Working with both companies while maintaining a relationship with TSMC allows Apple to diversify its supply sources. This approach protects them from potential supply chain disruptions linked to geopolitical challenges and from shortages of certain components due to rising demand in AI data centers.
Looking ahead, Intel’s next pivotal step will be the rollout of its 14A node technology. This will set the stage for serious competition against TSMC, highlighting its ambitions for 2027 and 2028. Tesla has already confirmed orders for chips using this advanced photolithography, reinforcing Intel’s renewed position in the semiconductor industry.
As the landscape of chip manufacturing evolves, Intel’s ability to leverage its advancements and partnerships will be crucial in standing up to TSMC. The next few years will determine whether Intel can become a genuine alternative in a highly competitive field—the clock is ticking toward 2027.
Image | Intel
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