Latest news with #DavidZinsner
Yahoo
16-05-2025
- Business
- Yahoo
Intel's new chip manufacturing technology is its greatest hope for a turnaround — and its biggest risk
Intel's (INTC) efforts to restore the chip giant to its former glory may hinge on a new manufacturing process the company calls 18A. Short for 18 angstroms — an angstrom is equal to 0.1 nanometers — 18A is, according to Wall Street analysts and chip industry experts, Intel's last hope to take back the semiconductor crown from rival TSMC (TSM). Available later this year, 18A takes advantage of two manufacturing techniques that TSMC isn't using yet: gate-all-around transistors and backside power. Intel says the technologies will improve its chips' performance and efficiency. But Intel isn't just using 18A to reclaim its place as a leading chipmaker. The company is also banking on using the technology to move in on TSMC's contract manufacturing business by building 18A-based chips for itself and custom versions for third-party customers. But that'll prove difficult. TSMC already builds chips for companies including AMD, Apple, and Nvidia. Intel opened up its manufacturing business to outside clients in 2021 under former CEO Pat Gelsinger. But Wall Street analysts and executives grew exasperated with his strategy and what they saw as unrealistic goals for the business, which lost $13.4 billion in 2024 despite recording a revenue of $17.5 billion. So far, Amazon and Microsoft have signed on to build their own chips using Intel's 18A process, with the hope that others will follow suit. But CFO David Zinsner says third-party commitments are "not significant" yet, according to Reuters. Intel's 18A is so important because it's introducing two technologies to the company's chips at once. First, it's taking advantage of gate-all-around transistors — next-generation transistors that can more actively control the flow of electricity through a chip. It's also using a technique called backside power, which changes where and how power is delivered to a chip's transistors to enable more efficiency and better performance. Together, the two technologies would help improve AI application performance without running into energy constraints, UC Santa Barbara engineering processor Kaustav Banerjee told Yahoo Finance. That would cut down on problems like overheating — something that reportedly plagued Nvidia's Blackwell graphics processing units (GPUs) when they were in development. Taking first-mover advantage in the chip industry typically means big wins for a semiconductor manufacturer. Intel's founders invented modern semiconductors, and the chipmaker was the first to successfully manufacture a new kind of transistor called Finfet in 2011. But TSMC flipped the script in 2019 when it became the first to successfully use advanced chipmaking technology called EUV lithography — massive machines worth hundreds of millions of dollars — to make semiconductors, which helped it soar past Intel and make the world's most advanced AI chips for companies including Apple and Nvidia. That's not all. Intel also already had to delay the rollout of 18A from the first half of 2025 to the second half, according to the company's previous earnings calls. Trying to perfect both backside power and gate-all-around transistors at once introduces greater manufacturing complexity and greater room for error. "Both of these technologies [are] enormously complex on [their] own," Chris Miller, author of "Chip War," told Yahoo Finance. "So it's even harder to do them simultaneously." A manufacturing employee at Intel's foundry in Oregon told Yahoo Finance on the condition of anonymity that the technology wasn't ready for external customers in December. In a follow-up interview in March, however, they said 18A "has gotten a lot better" and Intel staffers are "optimistic" about it. Another manufacturing employee at the fab said 18A is "on track." Still, they worried that Intel's planned layoffs could depress morale and hinder their work toward getting the process out the door. TSMC isn't sitting idly by, though. The company is also launching gate-all-around transistors through its N2 technology, which it plans to release later this year. It's also working to add backside power to its chips in 2026. Ensuring 18A works is only part of the equation. Intel also has to prove it can sign up customers to take advantage of the technology for their own chips and can pump them out in the volumes they need. "Can they do it? Yes, they can do it," Bank of America analyst Vivek Arya said. "But can they do it with the kind of yield and scale like TSMC? That, I think, remains to be seen." Gelsinger staked part of Intel's revival on his plans to turn the company into a third-party foundry. Tan appears to be set to stick to that plan. And while Intel expects its foundry business, which has been hemorrhaging money, to break even by 2027, Wall Street may not be willing to wait that long. Various analysts have called for Intel to ditch its third-party foundry, and even get out of the chip manufacturing business entirely, and stick to designing semiconductors like rivals AMD and Nvidia. But since Intel is the US's sole large-scale advanced chip manufacturer, the government is keen on keeping its manufacturing arm intact. Intel has secured $7.8 billion in US CHIPS Act funding, and ditching its foundry would put that funding at risk. "The US doesn't want to be exclusively dependent on foreign firms for advanced production and R&D. Right now, Intel is the only firm with advanced R&D in the United States," author Chris Miller explained. While TSMC is expanding its US footprint, investing $165 billion in new plants and research facilities in the coming year, only one-third of its most advanced chipmaking will take place in the US, the company said in an April call with investors. Still, Bank of America's Vivek Arya said TSMC's US expansion "blunts Intel's advantage to some extent." For Intel, it all comes down to proving 18A can succeed. We'll find out later this year. Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @ Email her at Email Daniel Howley at dhowley@ Follow him on X/Twitter at @DanielHowley. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-05-2025
- Business
- Yahoo
Intel says foundry business won't break even until 14A in 2027
When you buy through links on our articles, Future and its syndication partners may earn a commission. Currently, Intel's Foundry division loses billions every quarter as it invests heavily in new process technologies and production capacity. However, the company hopes that the Intel Foundry unit will break even sometime in 2027, which will coincide with the rollout out Intel's 14A manufacturing technology and production start on 18A-P node. Intel this week reaffirmed that the first product made on its 18A (1.8nm-class) fabrication process, the client PC processor (codenamed Panther Lake), will hit the market late this year and will ramp next year. The manufacturing technology will also be adopted for Xeon 'Clearwater Forest' and some third-party products, but from Intel's Foundry business perspective, 18A is will be a proof-of-concept for external clients. If this production node is a success, more potential customers will adopt its successors, including 18A-P, and 14A (1.4nm-class). "I think we do need to see more external volume come from 14A versus versus 18A, said David Zinsner, chief financial officer of Intel, at the J.P. Morgan Global Technology, Media and Communications Conference. "We have […] a bunch of bunch of potential customers, and then we get test chips, and then some customers fall out in the test chips, and then there is a certain amount of customers that kind of hang in there. So, committed volume is not significant right now, for sure. But, you know, I think we have got to partly prove ourselves a little bit with our own product and eat our own dog food here, and then […] we start to see some engagement around customers." Zinsner admitted that if the company choses to use High-NA EUV lithography with its 14A process technology — as it plans to at the moment — its costs will go up initially. Intel hopes that advantages enabled by the new fab tools will outweigh those higher costs. Like other contract chipmakers, Intel does not comment on its clients. The company also intends to produce more of its own silicon in house with its Panther Lake and Nova Lake CPUs, which will improve Intel's margins and its utilization of production capacities. As a result, Intel hopes that its Foundry unit will break even in 2027 and will be profitable from then on. "We still feel on track to to hit breakeven sometime in 2027," Zinsner said. "You know, I think when we committed to it in 2024, we said, 'it is going to be somewhere between 2024 and 2030, most people kind of settled in that that must mean 2027, and that is generally kind of what we are thinking is we can be breakeven." To break even, Intel Foundry only needs low- to mid-single-digit billions in annual external revenue, according to Zinsner. Most of 18A's volume will come from Intel's internal products, while 14A will require more external adoption. Intel's breakeven strategy also includes revenue from advanced packaging, mature nodes (like Intel 16), and partnerships with UMC and Tower. The company will continues to follow its 'smart capital' model, balancing internal and external wafer sourcing, and expects Foundry to compete for internal product demand to ensure efficiency and cost Tom's Hardware on Google News to get our up-to-date news, analysis, and reviews in your feeds. Make sure to click the Follow button.
Yahoo
16-05-2025
- Business
- Yahoo
Intel says foundry business won't break even until 14A in 2027
When you buy through links on our articles, Future and its syndication partners may earn a commission. Currently, Intel's Foundry division loses billions every quarter as it invests heavily in new process technologies and production capacity. However, the company hopes that the Intel Foundry unit will break even sometime in 2027, which will coincide with the rollout out Intel's 14A manufacturing technology and production start on 18A-P node. Intel this week reaffirmed that the first product made on its 18A (1.8nm-class) fabrication process, the client PC processor (codenamed Panther Lake), will hit the market late this year and will ramp next year. The manufacturing technology will also be adopted for Xeon 'Clearwater Forest' and some third-party products, but from Intel's Foundry business perspective, 18A is will be a proof-of-concept for external clients. If this production node is a success, more potential customers will adopt its successors, including 18A-P, and 14A (1.4nm-class). "I think we do need to see more external volume come from 14A versus versus 18A, said David Zinsner, chief financial officer of Intel, at the J.P. Morgan Global Technology, Media and Communications Conference. "We have […] a bunch of bunch of potential customers, and then we get test chips, and then some customers fall out in the test chips, and then there is a certain amount of customers that kind of hang in there. So, committed volume is not significant right now, for sure. But, you know, I think we have got to partly prove ourselves a little bit with our own product and eat our own dog food here, and then […] we start to see some engagement around customers." Zinsner admitted that if the company choses to use High-NA EUV lithography with its 14A process technology — as it plans to at the moment — its costs will go up initially. Intel hopes that advantages enabled by the new fab tools will outweigh those higher costs. Like other contract chipmakers, Intel does not comment on its clients. The company also intends to produce more of its own silicon in house with its Panther Lake and Nova Lake CPUs, which will improve Intel's margins and its utilization of production capacities. As a result, Intel hopes that its Foundry unit will break even in 2027 and will be profitable from then on. "We still feel on track to to hit breakeven sometime in 2027," Zinsner said. "You know, I think when we committed to it in 2024, we said, 'it is going to be somewhere between 2024 and 2030, most people kind of settled in that that must mean 2027, and that is generally kind of what we are thinking is we can be breakeven." To break even, Intel Foundry only needs low- to mid-single-digit billions in annual external revenue, according to Zinsner. Most of 18A's volume will come from Intel's internal products, while 14A will require more external adoption. Intel's breakeven strategy also includes revenue from advanced packaging, mature nodes (like Intel 16), and partnerships with UMC and Tower. The company will continues to follow its 'smart capital' model, balancing internal and external wafer sourcing, and expects Foundry to compete for internal product demand to ensure efficiency and cost Tom's Hardware on Google News to get our up-to-date news, analysis, and reviews in your feeds. Make sure to click the Follow button. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
Intel Stock Falls as Foundry Customers Hold Back
Intel's INTC) stock dipped after their CFO David Zinsner spoke at the J.P. Morgan tech conference. He admitted that, right now, outside interest in Intel's new foundry services is pretty thin. Even as they roll out the next-gen 18A node, most of the early volume is booked for Intel's own chipsthink the upcoming Panther Lakelanding before year-end. Warning! GuruFocus has detected 7 Warning Signs with INTC. Zinsner was quick to note that hitting break-even on the foundry side doesn't demand huge third-party ordersmid-single-digit billions in revenue should do itbut convincing external clients to trust Intel on IP protection and supply-chain security will take time. Investors reacted by driving INTC down to $21.26 on May 14, off about 1.9%, while AMD and TSMC climbed 5.8% and 0.7%, respectively. Price targets are all over the mapfrom $14 to $28.30with an average of $21.30 and a GuruFocus value of $23.50. On the leadership front, Zinsner had praise for new CEO Lip-Bu Tan's push to flatten the organization and get engineers back on the lab floor, closer to customer feedback. He hinted that this shift could turbo-charge Intel's AI roadmap by speeding up product cycles and tightening client collaboration. Why it matters: If Intel can't drum up external foundry business soon, it risks lagging behind AMD and TSMC just as demand for advanced nodes heats up. Investors will be watching for that first big outside deal and any signs of momentum in Q2's guidance. This article first appeared on GuruFocus.
Yahoo
15-05-2025
- Business
- Yahoo
Intel Stock Falls as Foundry Customers Hold Back
Intel's INTC) stock dipped after their CFO David Zinsner spoke at the J.P. Morgan tech conference. He admitted that, right now, outside interest in Intel's new foundry services is pretty thin. Even as they roll out the next-gen 18A node, most of the early volume is booked for Intel's own chipsthink the upcoming Panther Lakelanding before year-end. Warning! GuruFocus has detected 7 Warning Signs with INTC. Zinsner was quick to note that hitting break-even on the foundry side doesn't demand huge third-party ordersmid-single-digit billions in revenue should do itbut convincing external clients to trust Intel on IP protection and supply-chain security will take time. Investors reacted by driving INTC down to $21.26 on May 14, off about 1.9%, while AMD and TSMC climbed 5.8% and 0.7%, respectively. Price targets are all over the mapfrom $14 to $28.30with an average of $21.30 and a GuruFocus value of $23.50. On the leadership front, Zinsner had praise for new CEO Lip-Bu Tan's push to flatten the organization and get engineers back on the lab floor, closer to customer feedback. He hinted that this shift could turbo-charge Intel's AI roadmap by speeding up product cycles and tightening client collaboration. Why it matters: If Intel can't drum up external foundry business soon, it risks lagging behind AMD and TSMC just as demand for advanced nodes heats up. Investors will be watching for that first big outside deal and any signs of momentum in Q2's guidance. This article first appeared on GuruFocus.
