Intel (NASDAQ:INTC) is betting the farm on its foundry business. Over the past four years, the chip behemoth invested roughly $95 billion in capital spending to transform itself into a leading-edge foundry, aiming to take on the likes of TSMC and Samsung. Yet the stock is down nearly 40% from highs seen in 2024 as investors remain skeptical of the plans. The foundry business lost nearly $13 billion last year. However, things could be turning around, with Intel’s new process nodes, which are in advanced stages of deployment. So what’s happening with the foundry business?
18A Process Will Make Or Break Foundry Bet
Intel is counting on its 18A process, considered its most advanced manufacturing technology yet, with a 1.8-nanometer process node, to turn around its foundry business. Intel says the node is presently in risk production, where a small batch of chips is produced to test and refine the production process before volume manufacturing, which is slated for later this year, begins. Laptops powered by 18A-based processors are already being sampled with OEMs.
The process produces chips with technologies including RibbonFET gate-all-around transistors, and PowerVia backside power delivery, allowing for smaller transistors that boost performance and power efficiency. PowerVia could offer tangible advantages in AI as well as high-performance computing workloads. Overall, Intel’s process node is touted to be faster and have a lower power consumption versus TSMC’s competing node, which is also expected to go into mass production around the same time frame. However, TSMC’s chips are likely to have an edge in terms of density as well as cost.
Intel also announced a high-performance variant called 18A-P for which it has begun early wafer production at its fabs. The company is also developing an advanced version dubbed 18A-PT, which supports 3D stacking with hybrid bonding interconnects, enabling vertical die stacking directly on top of its most advanced node. While rival TSMC already has a similar process in its production, 18A-PT could enable Intel to churn out highly integrated chiplet designs with greater density and efficiency.
Next Up: The 14A Node
At the recently held Intel Foundry Direct 2025 event, Intel confirmed that it was now working with lead customers for its 14A process (the 1.4nm equivalent), the successor to 18A. Test chips are being prepared for tape-out, and the node will feature an enhanced version of Intel’s backside power delivery technology. Intel is targeting risk production of the new process by 2027. TSMC’s competing 1.4 nm-class node is expected to arrive only in 2028. This might give Intel a potential one-year lead, enabling it to attract more high-performance computing and AI chip customers.
Intel And America’s Chip Comeback
Intel might be sitting at the center of America’s push to reshore semiconductor manufacturing. Intel is currently the only U.S.-based foundry with both leading-edge process technology as well as advanced packaging. While industry leader TSMC has been expanding its foundry capacity in the U.S., a new Taiwanese law bars it from producing its most advanced chips overseas. This leaves Intel as the only domestic player with leading-edge manufacturing technology. As chips become critical to everything from AI to defense, the U.S. government has labeled them a national security priority. With the largest domestic chipmaking footprint, Intel might be uniquely positioned to benefit from this shift.
Intel Stock Volatility
The decrease in INTC stock over the last 4-year period has been far from consistent, with annual returns being considerably more volatile than the S&P 500. Returns for the stock were 6% in 2021, -47% in 2022, 95% in 2023, and -60% in 2024. The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is considerably less volatile. And it has comfortably outperformed the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics. So, is this the right time to buy Intel stock?
Intel stock trades at under 25x estimated 2026 earnings, which is a reasonable multiple. To be sure, Intel’s declining earnings in recent years, loss of market share to AMD in the PC and server markets, and the broader pivot from CPUs to GPUs in the AI age do pose a risk for the stock. That said, if the foundry business does execute well on its latest 18A process and win over big customers, the stock could see a considerable upside. We value Intel stock at $25 per share, about 17% ahead of the current market price. See our analysis of Intel’s valuation for a closer look at what’s driving our price estimate for Intel.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
