Intel's new CEO, Lip-Bu Tan, is considering a major shift in the company’s chip manufacturing (foundry) business strategy in an effort to attract large clients, according to two sources familiar with the matter. This potential change would mark a significant departure from the approach taken by his predecessor, Pat Gelsinger. Under the proposed strategy, Intel may stop promoting its advanced 18A chipmaking technology—once a central focus of Gelsinger’s plans—to external clients. Since taking charge in March, Tan has aggressively pursued cost-cutting and new strategies to revive Intel, which has been struggling. By June, he began expressing concerns that 18A was no longer appealing to potential customers.

If Intel ceases external sales of 18A and its variant 18A-P—technologies that cost billions to develop—the company would likely have to record a financial write-off. Experts told Reuters this could translate to losses in the hundreds of millions or even billions. Intel declined to comment on speculation, but stated that its main 18A customer has always been itself. The company plans to begin mass production of its high-performance "Panther Lake" laptop chips in 2025 using 18A.

Winning external clients remains crucial for Intel’s foundry future. While Intel's 18A process has faced delays, rival chipmaker TSMC is progressing steadily with its N2 technology. To compete more effectively, Tan is reportedly shifting focus to a next-generation process, 14A, which may offer a competitive edge over TSMC. This pivot is aimed at securing business from major companies like Apple and Nvidia, which currently rely on TSMC. Tan has asked Intel to prepare options for the board’s consideration, including halting 18A promotions to new clients. A final decision may not come until a later board meeting due to the issue's complexity and financial implications. Intel reaffirmed its leadership's commitment to improving the company’s financial health and customer trust, stating they are identifying key focus areas to turn the business around.

After recording an $18.8 billion net loss in 2024—its first unprofitable year since 1986—Intel is under pressure to regain stability. Like Gelsinger, Tan inherited a company that has fallen behind in manufacturing and missed key technology trends like mobile computing and AI. Intel is still planning internal production using 18A later this year, but whether it will win new external orders remains uncertain. Meanwhile, the success of 14A, which Intel is customizing for specific clients, is not guaranteed. While the company will honor existing 18A commitments to clients like Amazon and Microsoft, those deals are limited in scale and bound by timelines that make switching to 14A impractical.

Tan’s broader strategy is still evolving. He has already restructured leadership and reduced layers of middle management. A decision to shift away from selling 18A would be one of his most consequential yet. The 18A process introduced advanced technologies, including new energy delivery systems and transistor designs, aimed at putting Intel ahead of TSMC. However, analysts believe it’s roughly on par with TSMC’s N3 process, which has been in volume production since 2022. If Tan proceeds with his plan, Intel will center its foundry efforts, clients, and resources around the 14A process, where it sees better prospects to compete. His insights on 18A stem from decades of industry experience and close customer relationships, the sources said.