Intel's new CEO is exploring a big change to its contract manufacturing business to win major customers, two people familiar with the matter told Reuters, in a potentially expensive shift from his predecessor's plans.\n\nThe new strategy for Intel's foundry business would mean offering outside customers a newer generation of technology, the people said. That next-generation chipmaking process, analysts believe, will be more competitive against Taiwan Semiconductor Manufacturing Co. in trying to land major customers such as Apple or Nvidia.\n\nSince taking the company's helm in March, CEO Lip-Bu Tan has moved fast to cut costs and find a new path to revive the ailing U.S. chipmaker. By June, he started voicing that a manufacturing process known as 18A, in which prior CEO Pat Gelsinger had invested heavily, was losing its appeal to new customers, said the sources, who spoke on condition of anonymity.\n\nTo put aside external sales of 18A and its variant 18A-P, manufacturing processes that have cost Intel billions of dollars to develop, the company would have to take a write-off, one of the people familiar with the matter said. Industry analysts contacted by Reuters said such a charge could amount to a loss of hundreds of millions, if not billions, of dollars.\n\nIntel declined to comment on such \"hypothetical scenarios or market speculation.\" It said the lead customer for 18A has long been Intel itself, and it aims to ramp production of its \"Panther Lake\" laptop chips later in 2025, which it called the most advanced processors ever designed and manufactured in the United States.\n\nIntel is spending $28 billion to build chip manufacturing facilities in New Albany, the largest economic development project in Ohio history.\n\nThe Ohio fabs are expected to create 3,000 jobs with an annual payroll of $405 million, along with several thousand construction jobs.\n\nBut the heavily celebrated project has faced delays, falling behind an aggressive timetable set when it was announced in 2021 that would have had production start this year.\n\nThe company now expects the first of its Ohio facilities to open in 2030 at the earliest.\n\nPersuading outside clients to use Intel's factories remains key to its future. As its 18A fabrication process faced delays, rival TSMC's N2 technology has been on track for production.\n\nTan's preliminary answer to this challenge: focus more resources on 14A, a next-generation chipmaking process where Intel expects to have advantages over Taiwan's TSMC, the two sources said. The move is part of a play for big customers like Apple and Nvidia, which currently pay TSMC to manufacture their chips.\n\nTan has tasked the company with teeing up options for discussion with Intel's board when it meets as early as this month, including whether to stop marketing 18A to new clients, one of the two sources said. The board might not reach a decision on 18A until a subsequent autumn meeting in light of the matter's complexity and the enormous money at stake, the person said.\n\nIntel declined to comment on what it called rumor. In a statement, it said: \"Lip-Bu and the executive team are committed to strengthening our roadmap, building trust with our customers, and improving our financial position for the future. We have identified clear areas of focus and will take actions needed to turn the business around.\"

Intel's new CEO considers big chipmaking shift, Reuters reports

Intel's new CEO, Lip-Bu Tan, is exploring a strategic shift in its foundry business to compete with Taiwan Semiconductor Manufacturing Co. (TSMC) by moving away from the 18A chipmaking process and focusing on 14A technology. The company is also investing $28 billion in new manufacturing facilities in Ohio, though the project faces delays. Intel aims to attract major customers like Apple and Nvidia by improving its competitive position in chip manufacturing.