Intel 10Q filing - We may cancel 14A if we do not win a large external customer

[Xebec]

I saw an artice on this posted elsewhere, and verified that page 26 of the recent 10Q filing with the SEC has this verbiage:

We are focused on the continued development of Intel 14A, the next generation node beyond Intel 18A and Intel 18A-P, and on securing a significant external customer for such node. However, if we are unable to secure a significant external customer and meet important customer milestones for Intel 14A, we face the prospect that it will not be economical to develop and manufacture Intel 14A and successor leading-edge nodes on a go-forward basis. In such event, we may pause or discontinue our pursuit of Intel 14A and successor nodes and various of our manufacturing expansion projects. While we continue to evaluate Intel 14A for use in future Intel products and our plan includes an initial product designed to utilize Intel 14A, at present we are maintaining the option to design future Intel products requiring nodes with performance beyond Intel 18A and Intel 18A-P to be produced internally or by an external foundry. If we were to discontinue development of Intel 14A and successor nodes, we expect that a majority of our products would continue to be manufactured in our own facilities utilizing our nodes up to Intel 18A-P through at least 2030.

Source:

https://www.intc.com/filings-reports/all-sec-filings/content/0000050863-25-000109/0000050863-25-000109.pdf

 

[tomatoma]

This is practically a discontinuation of 14A

 

[tooLongInEDA]

Welcome clarity. Though increasingly obvious that Intel products just don't have the volume to justify many more future nodes, it needed saying in public at some point.

What is also notable here is that there is no mention whatever of the CHIPS Act, government subsidies or US national security. LBT has clearly presented this as a pure return on investment decision. Many readers may disagree with this view, but that is what he's emphasising here. He's doubtless still interested in CHIPS Act subsidies, but he's certainly not going about it in the rather heavy handed public way Pat did.

 

[siliconbruh999]

It's a subtle warning to US Government as well.

 

[Jure]

I wonder how much they are currently spending on 14A . Are technology development costs that much smaller, that they can just afford to continue developing although they don't know, if they will actually put it into production? Sounds like there is interest, but people are not willing to commit / invest. If no one was interested, LBT would just shut this down.

 

[siliconbruh999]

I wonder how much they are currently spending on 14A . Are technology development costs that much smaller, that they can just afford to continue developing although they don't know, if they will actually put it into production? Sounds like there is interest, but people are not willing to commit / invest. If no one was interested, LBT would just shut this down.

i think yes based on this

 

[tomatoma]

I wonder how much they are currently spending on 14A . Are technology development costs that much smaller, that they can just afford to continue developing although they don't know, if they will actually put it into production? Sounds like there is interest, but people are not willing to commit / invest. If no one was interested, LBT would just shut this down.

At the very least, it may be trying to keep R&D costs down as much as possible by making use of the experience gained in 18A and the experiences gained from the future.
Well, R&D costs are cheaper than capital investment costs.

 

[DanX]

This is what I called assert your competitive strength .
Bravo to LBT, at least he acknowledged the problem.

 

[tomatoma]

It's a subtle warning to US Government as well.

If you think of "true" American-made products, I think you're right

Is it not possible for the United States to achieve both domestic production and foreign capital like Japan's Rapidas and JASM?
I feel like Japan is doing well

America is the two extremes…

 

[hist78]

i think yes based on this
View attachment 3386

I believe this picture is related to the Intel Foundry Direct event held in May 2025.

If this Intel diagram is accurate, it reveals a serious issue. For an advanced fab, the typical ratio of spending on equipment to spending on space/building is at least 2 to 1. However, according to the diagram, Intel appears to be significantly underinvesting in equipment procurement, by roughly $35 to $37 billion, at minimum. There isn't so much money available for Intel to make up the gap to bring all the facilities into production, even before finding customers.

Probably Intel leadership finally recognized this problem and the negative consequences.

 

[kevin01]

I believe this picture is related to the Intel Foundry Direct event held in May 2025.

If this Intel diagram is accurate, it reveals a serious issue. For an advanced fab, the typical ratio of spending on equipment to spending on space/building is at least 2 to 1. However, according to the diagram, Intel appears to be significantly underinvesting in equipment procurement, by roughly $35 to $37 billion, at minimum. There isn't so much money available for Intel to make up the gap to bring all the facilities into production, even before finding customers.

Probably Intel leadership finally recognized this problem and the negative consequences.

Under Pat, they were doing 'shell first,' which is also politicians' favorite. You know, building shells spurs a lot of local and domestic economic activities.

 

[Daniel Nenni]

It's a subtle warning to US Government as well.

It is a subtle warning to the entire semiconductor ecosystem. One which I will be repeating at every possibility. Are you hearing me Apple?

• "14A will require confirmed customer commitments in terms of yield, performance, and volume before any CapEx is allocated. We will build what our customers need, when they need it... not before" LBT.

 

[kevin01]

It is a subtle warning to the entire semiconductor ecosystem. One which I will be repeating at every possibility. Are you hearing me Apple?

I guess that Apples and Nvidias do not give a shxt about monopoly prices, as long as their competitors are paying the same prices. Also, Corp. executives are quite (and sometimes extremely) short-sighted, they usually don't worry about things that may (and may not) happen in 2 years out.

 

[Daniel Nenni]

I guess that Apples and Nvidias do not give a shxt about monopoly prices, as long as their competitors are paying the same prices. Also, Corp. executives are quite (and sometimes extremely) short-sighted, they usually don't worry about things that may (and may not) happen in 2 years out.

This will be the ultimate test to your theory....

 

[siliconbruh999]

It is a subtle warning to the entire semiconductor ecosystem. One which I will be repeating at every possibility. Are you hearing me Apple?

• "14A will require confirmed customer commitments in terms of yield, performance, and volume before any CapEx is allocated. We will build what our customers need, when they need it... not before" LBT.

+1 from me for your effort you should add +1 reaction to the forum it's really useful

 

[kevin01]

So, what is the worst case for IFS? It seems to me that it won't be too bad for Intel, even if 14A doesn't work out. 18A could be a super long node, potentially serving for 10 years. Its ROI is going to be quite positive from now on. However, quite a lot of process R&D jobs would be cut if that were the case.

 

[Daniel Nenni]

So, what is the worst case for IFS? It seems to me that it won't be too bad for Intel, even if 14A doesn't work out. 18A could be a super long node, potentially serving for 10 years. Its ROI is going to be quite positive from now on. However, quite a lot of process R&D jobs would be cut if that were the case.

There are two parts to IFS, one is filling existing fabs and two is partnering with big a customer on new fabs. If a big customer does not partner on 14A, Intel could always go fab light. Continue 14A development but utilize existing fabs for manufacturing while outsourcing to TSMC when necessary. TI does this with great success. In the chiplet era this is even more feasible for Intel. You can pump out plenty of 14A CPU chiplets in the OR R&D facility while filling in the design with 18A or TSMC N3/2 chiplets. Hopefully 14A will be a performance optimized node greater than TSMC A14.

I just don't see a total Intel manufacturing shutdown being feasible and I know of no buyers for IFS unless it is an asset sale. Merging with GF would be an asset sale in my opinion.

 

[Daniel Nenni]

Best question of the Q&A:

Stacy Raskin, Analyst, Bernstein Research: Hi, guys. Thanks for taking my questions. So the first one, I wanted to touch on eighteen a and fourteen a. So you said eighteen a would be supplying the next three generations of Intel products. So I guess that’s 2026, ’27, and ’28.

So I guess that would suggest 14, if it comes out, be 2029 at the earliest. I I I guess, number one, is that timing correct? And then, you know, just within that, given the plans, you know, at least the the contingency plans to maybe not do 14 a, I mean, I guess, this suggested if 14 a dies, does the foundry strategy die with it? And can you run a sustainable business just on internal volume with 18A and increasing outsource if 14A doesn’t do what it needs to do?

Lip Bu Tan, CEO, Intel Corporation: Stacy, it’s a good question. So first of all, I think the as I mentioned earlier, 18A is important to us for the three generation of internal product. And then when we’re ready, then we can go outside with more confident to get a customer to support us. And then on the 14A, same as the A14 from TSMC, the timing is all in the 28, 29. So that’s no different, no change.

And clearly, we’re laser focused on the process technology with the two engaging customer and with clear milestone to deliver. And then clearly, think we’re going to learn a lot and then we’re not going to put any CapEx until we see the yield performance and also our internal customer and external customer feedback and the volume commitment, then we will put the CapEx in. And so the perception will be very clear. We are committed to the foundry business. And then meanwhile, we’re going to be very disciplined in our CapEx deployment, make sure that we see the volume, see the customer commitment, then we deploy.

David Zinsner, CFO, Intel Corporation: Maybe I’ll just add one more thing. If I understood the last question, can you still do AT and A, I think is what you said. We actually won’t get to peak volumes on AT and A until probably the beginning of the next decade. So this is going be a node that we use for a very long time and we’re expecting a really good ROI on it. We largely calculating that based on the internal uses for it, given that most of that is coming internally in the near term.

I would say I wouldn’t write off 18A as potentially getting external customers at some point. Clearly, we probably won’t get a lot in wave one as it seems, but there will be multiple waves and 18A will find different use cases over time and there’ll be more opportunities for us to attract external customers after we do so much improvement in terms of performance and yield on our own products.

https://www.investing.com/news/transcripts/earnings-call-transcript-intels-q2-2025-results-miss-eps-forecast-stock-dips-93CH-4152173

 

[Y.H]

It is a subtle warning to the entire semiconductor ecosystem. One which I will be repeating at every possibility. Are you hearing me Apple?

• "14A will require confirmed customer commitments in terms of yield, performance, and volume before any CapEx is allocated. We will build what our customers need, when they need it... not before" LBT.

Actually for leading node like 14A, I don’t think there are much customers that’s have the financial resources to be early adopters. Apple , AMD , Nvidia , Broadcom and hyperscalers? Amd and Nvidia is out of question. Apple doesn’t seem to have engaged in some discussions with Intel , at least not publicly announced. Hyperscalers actually use many parts and IP from Broadcom. So I m guessing Broadcom is that external customer that Intel is engaging with to build 14A from ground up to be a foundry node

 

[siliconbruh999]

I don't worry about Internal if they see meaningful external commitment they will force Intel Product to move around a bit.