Intel faces significant challenges as it aims to restore its position as a leading U.S.-based chip manufacturer. Once a tech giant, Intel has seen its market share decline sharply, recently losing its place on the Dow Jones Industrial Average to Nvidia. Amid falling stock prices, layoffs, and financial losses, Intel’s future hinges on key strategies and successful execution of its recovery plan.
Intel’s 18A process technology is pivotal to its potential comeback. This new node promises smaller, more efficient transistors, aligning Intel with competitors like TSMC in the race for high-powered chip production. The 18A node’s success could attract major clients and reestablish Intel’s relevance in a sector increasingly dominated by companies like Nvidia and AMD, which outsource manufacturing to TSMC.
As part of its revival efforts, Intel plans to split off its manufacturing division into a subsidiary, Intel Foundry, which would serve as a dedicated foundry business for its chip-design operations. For this to succeed, Intel needs other tech companies, including competitors, to rely on it for chip manufacturing. Although Intel has made strides in cost-cutting—through real estate sales and workforce reductions—analysts warn that the company’s current situation is precarious.
Federal aid under the CHIPS Act provides an additional lifeline. Washington policymakers view Intel as crucial to bolstering U.S. chip production amid global supply concerns. Commerce Secretary Gina Raimondo has privately lobbied tech companies to source from Intel, emphasizing the importance of a domestic chip industry. Intel has yet to receive CHIPS Act funds, but if allocated effectively, these could provide a path back to stability.
The situation has sparked discussions around potential contingencies, including a breakup or merger with other tech giants if Intel’s recovery falters. Some lawmakers have even raised the possibility of mergers with companies like AMD or Marvell if Intel’s losses and technological struggles persist.