Ailing chip giant targets 2027 break-even as costly EUV tools raise stakes
Dan RobinsonWed 14 May 2025 // 17:20 UTC
Intel is wooing external chip customers for its 14A process node to justify the high costs involved, and aims for the foundry division to break even by 2027 - as part of ongoing effort to shake off the struggles of recent years.
Speaking at the JP Morgan Global Technology, Media and Communications Conference this week in Boston, Massachusetts, Intel chief financial officer David Zinsner said the upcoming 18A manufacturing process will be mainly used for the company's own products, but that its successor, 14A, would be a different matter.
"The first 18A customer is going to be Intel Products," Zinsner told the audience. "Yeah, it's Panther Lake, and the first SKU is expected to be out by the end of the year. So, it is our first win, so to speak, if you put on the Intel Foundry hat with 18A."
The chipmaker "always expected" the predominant volume of 18A was going to be internal, he claimed, and it doesn't need much external business to fill in the gaps to make 18A a good node from a value perspective.
"I feel actually pretty good about our ability to drive a reasonable return on 18A," Zinsner said, while 14A "obviously gets more expensive."
"At present, it's expected to have High NA, and, you know, that's a more expensive tool," Zinsner said. "So, you know, I think we do need to see more external volume come from 14A versus 18A," he stated, referring to the most advanced extreme ultraviolet (EUV) lithography machines used in chip manufacturing, of which Intel has procured at least two from Netherlands-based ASML. The "high NA" prefix is to do with higher numerical aperture (NA), and thus better resolution, in the newer ASML optical systems.
Asked when Intel's foundry biz, which it split off into a separate business unit under the Intel brand last year, will start making a profit, Zinsner would only say that the break-even point was likely to come in 2027.
"We still feel on track to hit break-even sometime in 2027. You know, I think when we committed to it in '24, we said, hey. It's gonna be somewhere between '24 and 2030, and most people kind of settled in that that must mean '27, and that's generally kind of what we're thinking is when we can be break-even," he added.
This wouldn't require it to make a huge amount of revenue, he claimed, saying: "It's somewhere in the, you know, low to mid-single digit billions of revenue that Foundry's got to get from external sources. But I would just remind you that some of that's going to be our partnership with UMC, some of that's going to be our partnership with Tower, some of that's gonna be packaging, and some of that's going to be 18A, some of that actually is gonna be older generations, like Intel 16. So it's not a ton that has to come from 18A for it to work."
Zinsner also disclosed that since the global supply chain issues experienced during the COVID pandemic, many customers are seeking a second source for the silicon chips they have made, and Intel Foundry could be the ideal candidate.
"I hear customers wanting to have a second source, it doesn't mean that the competitors or the largest competitor won't get every bit of share that they want, but I think there's always a requirement for a second source in these cases, and that's the opportunity and that's the area we want to fill," he said.
Even Intel itself uses other chip manufacturers – chiefly TSMC – where necessary.
"I would tell you that we will have a fair amount of volume at external foundries, you know, mainly TSMC on a go-forward basis. You know, Products has some latitude as to how they design products. We go through all of that as a team, and of course we want to see a fair amount of the volume come from Intel Foundry, but we also recognize there are unique situations and performance requirements that would drive you to another source of the wafer," he explained.
"We want that because we want to drive the best products ultimately for our customers, and we also feel like it's a healthy dynamic to have Foundry feel like it's competing for every wafer with Intel Products, and, you know, I think that drives better performance out of Intel Foundry as well."
Intel's CFO also had high praise for his new boss, chief exec Lip-Bu Tan, appointed in March, for his efforts to turn around the ailing chip giant.
"I think it's a fair assessment that Lip-Bu isn't thinking about massive changes. I think, you know, when he looks at the business, what he feels is the biggest issue at this point is a lack of execution," Zinsner told the audience.
"He is attacking that in a number of different ways. He is really flattening the organization, and he's already done that at the executive team level. I mean, he's up to like 15, 17 direct reports. He's got a lot more engineering leaders reporting directly to him as opposed to having an intermediary report between them.
"I think this flattening the organization is important to him because what he wants is the lowest level in the organization to be closer to him, so that he's hearing the good, the bad, the ugly of what's going on so that he can help address those. And I think through that, I think we'll see a lot of improvement in terms of the execution."
In terms of execution, Intel has already flattened the careers of many employees, with recent reports suggesting the firm has further plans to shed up to 20 percent of its current workforce, or around 20,000 people.
This comes on top of the roughly 15 percent of staff it lost in August, followed by other layoffs that have seen the chipmaker left with a headcount of 102,600 as of last month. ®
Intel needs external customers to make 14A pay off
: Ailing chip giant targets 2027 break-even as costly EUV tools raise stakes
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except Intel products.