☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 27, 2025.
1) Intel is constrained on manufacturing. Not by TSMC. But by IFS and mainly by Intel 7, a node from 2021. Normally constraints are good, it means you are running efficiently with lots of demand. But Intel is not growing. CCG (client)+DCAI (Datacenter) revenue is down. Intel is constrained by older technologies, not newer ones, during a time of non-growth…
2) Intel Margins are low (35% Gross Margins). Intel Margins were once the envy of all hardware and chip companies. GAAP operating margins are negative. Non-GAAP is lower than all memory companies, TSMC, NVIDIA, Broadcom, Qualcomm, AMD, etc, etc. This is a year after taking a one time write down of old assets and a change to their depreciation schedule that saves them billions per year right now
3) If Intel Foundry found a magical external customer, that instantly gave them $7B per year in revenue, equivalent to all of Global foundries, 25 times the external revenue they have today, at absolutely no cost at all to Intel…… IFS would still lose money. Let that sink in
4) Intel took write off charges in 2025 on 18A for what I call LCM. Lower of cost or Market. This is where you need cannot claim inventory as a WIP asset because the cost is higher than the value of the chip. Margins are below zero and/or Intel had to throw away a lot of 18A production.
5) Intel’s newest fabs 34 and 52 require that partner companies get 50% of the profit from them. Through two very different contracts, Apollo and Brookfield get half the profits IF the fabs are successful, and get payment from Intel if they do not hit milestones.
Summary
These are all quite scary and the stock was shaken. But in reality, it simplifies the challenges in my mind.
Intel manufacturing does not seem to have line of sight to being break even. If 18A and 14A ramp, the expenses are more headwinds, more losses. If they do not, the current margins are bad for another 4-5 years. Panther lake is widely recognized as a very good performance part…. First leadership product in 5+ years.
What if Intel followed AMD, Nvidia, Apple, Broadcom, Qualcomm, etc and focused on where it can be successful? How would the numbers be different?
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Mark Webb
Industry Expert with 25+ years experience in semiconductor and system engineering and manufacturing. Extensive experience and knowledge in NAND and SSD manufacturing, development, system testing with Industry leaders. Expertise in SSD/NAND/DRAM business models, Cost/pricing models, competitive analysis and supply chain. Leadership and management experience in Contract Manufacturing, ODM, OSAT, and Foundry Operations. Experience in Device, Product, and Process Integration Engineering on Logic, SOC and all Memory technologies.
Also Read:
Global 2nm Supply Crunch: TSMC Leads as Intel 18A, Samsung, and Rapidus Race to Compete
TSMC vs Intel Foundry vs Samsung Foundry 2026
Intel to Compete with Broadcom and Marvell in the Lucrative ASIC Business
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