Intel’s Lip-Bu Tan Says Foundry Turnaround Is Gaining Momentum as Chipmaker Pushes to Challenge...

Intel Chief Executive Officer Lip-Bu Tan said the company's foundry business is beginning to gain traction, signaling growing confidence that the struggling American chipmaker may finally be making progress in one of the most expensive and strategically important turnarounds in semiconductor history.

Speaking Monday on CNBC's Mad Money, Tan said Intel's efforts to manufacture chips for outside customers are attracting increasing industry interest as improvements emerge in the company's advanced manufacturing processes.

"Foundry is very important," Tan said. "It's one of the key national treasures."

The remarks come at a critical moment for Intel, which has spent years trying to regain technological leadership after falling behind rivals, including Taiwan Semiconductor Manufacturing Company, widely regarded as the world's dominant contract chipmaker.

Intel's foundry push, initially championed by former CEO Pat Gelsinger, is central to broader U.S. efforts to rebuild domestic semiconductor manufacturing capacity after decades of production migration to Asia.

Historically, Intel produced chips almost exclusively for its own products, particularly personal computers and data-center servers. The new strategy aims to transform the company into a contract manufacturer capable of fabricating semiconductors for external customers in direct competition with TSMC and Samsung Electronics.

The transition has been difficult and capital-intensive, requiring tens of billions of dollars in factory investments while Intel simultaneously attempts to restore competitiveness in advanced chip design and production.

Still, investors have rallied behind Tan since he was appointed CEO in March 2025. Intel shares have surged more than 300% since then as markets bet the veteran semiconductor executive can stabilize a company that had spent years losing technological ground, market share, and investor confidence.

Intel's 18A Process Emerges as Key Test

Much of the optimism surrounding Intel's recovery now centers on its advanced 18A manufacturing node, viewed by analysts as the company's most important technological milestone in years.

The process is intended to restore Intel's competitiveness in producing cutting-edge semiconductors used in artificial intelligence systems, high-performance computing, and next-generation consumer electronics.

Tan acknowledged that Intel's manufacturing performance was struggling when he took over.

"When I joined, 18A was not good," he said. "Now I'm seeing it."

A critical measurement in semiconductor production is manufacturing yield, the percentage of usable chips generated from each silicon wafer. Weak yields can devastate profitability and undermine customer confidence, particularly in the foundry business where reliability and scale are paramount.

Tan said Intel's recent yield improvements have surpassed industry expectations.

"The best practice is to see 7% or 8% yield improvement per month, and now I'm seeing it," he said.

The progress appears to be helping Intel regain credibility with prospective customers. According to Tan, more companies are approaching Intel about manufacturing partnerships as confidence in the company's technology improves.

"Multiple customers, they are working with us," Tan said. "We are looking forward to serve them."

While Tan declined to identify specific clients, his comments followed a report by The Wall Street Journal earlier this month that Intel and Apple had reached a preliminary agreement for Intel to manufacture some Apple-designed chips currently produced by TSMC.

Such a partnership would represent a major validation of Intel's foundry ambitions, given Apple's role as one of the world's most demanding semiconductor customers. Intel executives had previously indicated that clearer commitments from external foundry customers could emerge in the second half of 2026 and into early 2027.

U.S. Semiconductor Ambitions at Stake

Beyond corporate performance, Intel's foundry expansion carries strategic significance for Washington and the broader U.S. technology sector. The United States remains heavily dependent on Asian manufacturing for advanced semiconductor production, a vulnerability that policymakers increasingly view as a national security concern amid rising geopolitical tensions involving China and Taiwan.

"90 plus percent of the most advanced processor is manufacturing outside the country," Tan said. "So, I think it's important to bring some of them back."

Intel has invested heavily in expanding domestic production capacity, including a major advanced fabrication facility in Arizona using the 18A process. However, the company's separate mega-project in Ohio has encountered delays and is not expected to begin production until at least 2030, highlighting the enormous complexity and cost involved in building advanced semiconductor infrastructure.

Tan also pointed to Intel's next-generation 14A process as a potential long-term breakthrough capable of competing directly with TSMC's most advanced manufacturing technologies.

"It will be the same time as TSMC," Tan said. "That is a major, major breakthrough."

The comments underscore how much Intel's recovery is tied to the artificial intelligence boom reshaping the semiconductor industry. Exploding demand for AI infrastructure has intensified competition among chipmakers and manufacturers as companies race to secure production capacity for advanced processors powering data centers, AI models, and cloud computing systems.

Intel is attempting to position itself not only as a chip designer but also as a critical manufacturing alternative to Asian foundries at a time when governments and major technology firms are seeking greater supply-chain diversification.

It is not clear whether Intel can fulfil its aim to fully close the gap with TSMC. However, Tan's remarks suggest the company believes its long-troubled manufacturing business may finally be moving from recovery mode toward commercial relevance.