Intel Has a Lot to Prove in 2025

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www.fool.com, Jan. 01, 2025 – 

2025 will be a pivotal year for chip-giant Intel (INTC 1.16%) as it navigates an industry that it no longer dominates. A multiyear turnaround effort led by former CEO Pat Gelsinger, which aimed to turn Intel into a world-class foundry, has yet to pay off as the company struggles on multiple fronts.

In the PC market, a combination of sluggish demand, stiff competition from AMD, and Qualcomm launching its Arm-based laptop CPUs have left Intel fighting for market share. In the data center market, years of lackluster products, AMD's incredible comeback, and a shift in spending toward artificial intelligence (AI) chips have left Intel reeling. And in manufacturing, foundry customer wins have been few and far between as Intel drives toward completing its initial process technology roadmap.

Intel enters 2025 without a permanent CEO and with a strategy that's somewhat up in the air. This year will be crucial for the company.

Intel 18A needs to work

The final process node on Intel's initial foundry roadmap is Intel 18A. The company expects this process to be the best in the industry when it launches, and it's packed with features, including a new transistor design and backside power delivery. The company has filled out its post-18A roadmap, but the whole foundry strategy hinges on the success of Intel 18A.

Intel 18A is expected to be ready for production in early 2025, although it will take time for volumes to ramp up. The company has snagged a few big-name customers for Intel 18A, including Microsoft and Amazon, but it's unclear when those deals will begin to produce meaningful external foundry revenue. At the moment, essentially all of Intel's foundry revenue is internal, coming from the company's various product segments.

Intel plans to reach $15 billion in annual external foundry revenue by 2030. That ambitious target requires Intel 18A to deliver on its promises and launch on time. Any delays or missteps could be catastrophic for the company, not only because they would derail the foundry business, but also because Intel's next-generation products depend on Intel 18A.

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