Intel (INTC) experienced a volatile yet ultimately bullish 2025, with its stock climbing more than 80%, outperforming the “Magnificent Seven” tech giants and rival Advanced Micro Devices (AMD). The rally was fueled by a new CEO, Lip-Bu Tan, and significant investments from the US government, Nvidia (NVDA), and SoftBank (SFTBY). Yet despite these gains, Intel’s manufacturing segment still faces critical hurdles, particularly securing major external customers to make its foundry operations viable.
Morningstar analyst Brian Colello highlighted the cautious optimism surrounding Intel: “The company is ending the year with some confidence that it will be a relevant chip manufacturer in the US, which was uncertain at the start of the year. However, there hasn’t been a landmark deal to fully establish its manufacturing credibility.”
A legacy of innovation facing competitive pressures
Intel’s history underpins much of today’s digital world. The company developed the first microprocessors and the x86 architecture, laying the foundation for modern computing. Gordon Moore’s creation of Moore’s Law defined the pace of semiconductor innovation for decades. Unlike many peers that went “fabless” and outsourced manufacturing to firms like TSMC, Intel has maintained its in-house production.
However, years of strategic missteps and underinvestment left Intel trailing TSMC in manufacturing sophistication. This gap has eroded Intel’s competitiveness in CPUs for servers, laptops, and desktops, limiting the scale and profitability of its foundry business. Efforts by former CEO Pat Gelsinger to attract external clients and revitalize the foundry were hampered by high capital expenditure requirements and uncertain outcomes, prompting investor skepticism.
Leadership and investment renew investor confidence
The appointment of Lip-Bu Tan as CEO in March 2025 brought a renewed sense of discipline and credibility. Analysts praised his pragmatic approach, cost-control measures, and extensive industry network. Confidence further strengthened when the US government made a $9 billion investment in Intel, representing a 10% stake under the CHIPS Act, signaling support for onshoring semiconductor production amidst geopolitical tensions with China.
Bob O’Donnell of Technalysis noted: “Semiconductors are vital not only economically but also for national security. Intel has the largest domestic infrastructure to maintain true American chip production.” Additional investments of $2 billion from SoftBank and $5 billion from Nvidia further stabilized the company, though Nvidia’s funding did not secure foundry production contracts.
The 14A process: Intel’s make-or-break moment
Intel’s ability to attract major foundry clients hinges on the success of its 14A process, the next-generation manufacturing technology. While its 18A process is currently used primarily for internal products, securing clients such as Apple (AAPL), Nvidia, or Qualcomm (QCOM) for 14A is essential. Rumors suggest Apple may use Intel’s 18AP for entry-level chips, but significant external adoption remains uncertain.
David O’Connor from BNB Paribas emphasized: “Everything hinges on 14A. Its success will determine whether Intel’s foundry business survives or whether manufacturing could be scaled back long term.” Analysts caution that even with strong internal performance, a full turnaround may take years. Bernstein’s Stacy Rasgon remarked: “It took 10 years to lose this position. A recovery will not be quick.”
Outlook
While Intel’s 2025 performance demonstrates investor optimism and the company’s ability to leverage government and private-sector support, the long-term viability of its manufacturing segment remains the critical question. Success in securing large external customers for 14A and beyond will determine whether Intel can regain a leading position in semiconductor manufacturing or remain primarily a product-centric company. The next 12–18 months will be decisive for Intel’s foundry ambitions and overall market positioning.
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