Intel’s Foundry Unit Nears Major Client Agreements

Intel’s Chief Financial Officer, David Zinsner, signaled a potential strategic advancement for the company’s struggling manufacturing division. Speaking at the Morgan Stanley Technology Conference on Wednesday, Zinsner indicated that the chipmaker’s foundry business is close to securing several significant customer contracts. Each agreement is projected to generate annual revenue in the billions of dollars, a crucial financial boost for the semiconductor giant which has been facing considerable market pressure.

Advanced Packaging and Manufacturing Gain Traction

A primary driver of this emerging client interest is Intel’s advanced packaging portfolio, specifically its EMIB and Foveros technologies. These methods allow multiple computing and memory chips to be integrated into a single, high-performance processor—a capability becoming increasingly vital in the era of artificial intelligence, where processing demands grow more complex. Zinsner highlighted robust customer engagement in this segment.

The company has committed substantial investment to its 2.5D and 3D packaging capabilities. A key advantage of this technology is its ability to process not only Intel’s own chips but also those designed by external manufacturers, including industry leader TSMC. This operational flexibility is intended to broaden the appeal of Intel’s foundry services to a diverse client base.

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Beyond packaging, Intel is also observing growing external interest in its most advanced manufacturing node, the 18A process. Initially developed primarily for internal product lines, this technology may now be offered to third-party chip designers. This shift points to increasing market confidence in Intel’s manufacturing execution, following a period marked by previous delays.

Profitability Timeline and Scrutiny Over Supplier

Despite these encouraging developments, the path to profitability for the foundry unit remains a longer-term endeavor. Zinsner reaffirmed the existing corporate forecast, which does not anticipate the division reaching breakeven until the latter part of 2027.

Concurrently, the company faces scrutiny on a separate front. U.S. lawmakers from both major political parties have raised questions regarding Intel’s testing of manufacturing equipment from the supplier ACM Research, which has ties to China. In a formal letter, the legislators expressed national security concerns, suggesting sensitive U.S. technology could be at risk. Intel has refuted these allegations, stating that tools from ACM are not deployed in its production processes.