Analyst: Intel's new CEO to refocus on chip design, get major customers for its fab business

UBS analyst Timothy Arcuri says that Intel's freshly-minted CEO Lip-Bu Tan will most likely refocus on chip design in the short term, while securing big customers to strengthen its foundry business.

In his note to investors, Arcuri said that Intel is also reportedly working to finalize commitments from NVIDIA or Broadcom to use its semiconductor foundry business, while also advancing its new 18A manufacturing process. Intel is working on a new lower-power version of that 18A process node called 18AP, and should be appealing to chip companies.

Intel Foundry Services (IFS) is looking to compete directly against TSMC in the semiconductor space, with improvements to its advanced packaging technologies like its Embedded Multi-Die Interconnect Bridge platform that would compete against TSMC's CoWoS-L advanced packaging for HPC customers like NVIDIA and others.

Arcuri said: "Intel's (INTC) new CEO Lip-Bu Tan is likely to refocus on chip design in the short term and seek to attract major customers to strengthen the foundry business. In the short term, efforts will emphasize Intel's design and foundry capabilities, including attempts to bring NVIDIA (NVDA) or Broadcom (AVGO) as foundry clients".

He added: "A core strategy for Intel will be to continue developing the 18A process while actively introducing the lower-power 18AP version to the market, offering customers a more attractive alternative. NVIDIA (NVDA) is more likely than Broadcom (AVGO) to become an Intel foundry customer. Jensen Huang could consider adopting Intel's 18A process for gaming products; however, power consumption remains an unresolved issue".

"Intel can achieve further success in packaging through EMIB technology, comparable to TSMC's CoWoS-L platform, potentially enhancing cooperation opportunities with NVIDIA. Collaboration between Intel and United Microelectronics Corp. (UMC) is progressing smoothly, and production timelines could be accelerated to the second half of 2026. In this scenario, INTC/UMC could emerge as significant secondary suppliers of high-voltage FinFET processes after TSMC, potentially expanding supplies to Apple's products next year".

He finished with: "More detailed updates regarding Intel's foundry progress will be provided at the Direct Connect event scheduled for April 29".