Intel CEO reports increased momentum and customer interest in Foundry business

Intel CEO Lip-Bu Tan shared on Monday that there's significant progress in the company's outside manufacturing venture, marking a crucial part of Intel's revival journey.

"The foundry is incredibly significant," Tan expressed to Jim Cramer on CNBC's "Mad Money." "It's among the key national assets."

Intel’s production division, known as the foundry, stands as one of the most costly yet vital aspects of the company's renewal blueprint. Its purpose is to create semiconductors for other clients while attempting to revitalise advanced chipmaking within the US, countering years of overseas preeminence. 

Traditionally, Intel’s factories manufactured only their own chips utilised in PCs and data centres. Tan’s predecessor, Pat Gelsinger, backed the expensive external foundry plan.

Intel's shares have escalated over 300% since Tan became CEO in March 2025, with investors hopeful that the experienced chip executive will steady the faltering tech company following years of challenges. Many wondered if Tan would fulfil Intel's foundry aspirations by elevating its manufacturing prowess to compete with companies like Taiwan Semiconductor Manufacturing Co.

Tan indicated that the organisation is making concrete headway towards achieving that aim.

He notably highlighted advancements in Intel’s cutting-edge 18A manufacturing process, which investors have closely watched as a crucial phase of the company's recovery. Upon taking the helm, Tan found the 18A process lacking efficiency.

"Now there's visible improvement," stated Tan, who helmed chip design firm Cadence Design Systems from 2009 to 2021 and had a two-year tenure on Intel’s board ending in 2024.

Manufacturing yield, which is the percentage of usable chips from each wafer, is a vital statistic for gauging profitability and customer trust in the foundry segment. Tan remarked that Intel's achievements have surpassed expectations.

"Achieving a 7% or 8% monthly yield improvement is the benchmark, and now that’s happening," he noted.

These enhancements are beginning to attract customer interest, Tan explained. As Intel’s manufacturing capabilities advanced, more potential clients have reached out to discuss leveraging its foundry services.

On May 8, The Wall Street Journal reported that Intel and Apple had struck a preliminary agreement for Intel to manufacture select Apple chips, presently produced by TSMC. When questioned by Cramer about these reports, the CEO opted not to reveal any client identities.

Nonetheless, Tan announced that Intel anticipates securing commitments from multiple foundry clients in the latter part of the year. "Several clients are partnering with us," he commented. "We eagerly anticipate serving them."

These remarks are in line with previous statements from Intel executives to investors. During the company’s April earnings call, CFO David Zinsner mentioned Intel anticipated more definitive signs from external foundry clients in the latter half of the year and into early 2027.

Beyond the transformation of Intel, Tan underscored the strategic importance of the foundry segment for the American semiconductor supply chain. Intel has constructed a new facility in Arizona that utilises the 18A process, although a separate Ohio project has experienced significant setbacks with production not expected before 2030.

"Over 90 percent of the leading-edge processors are manufactured abroad," he pointed out. "So, it seems crucial to bring some production back home."

Looking ahead, Tan projected that Intel's next-generation 14A process might eventually rival TSMC, widely acknowledged as the foremost third-party chip manufacturer.

"It will align with TSMC's timeline," he noted. "That signifies a tremendous breakthrough."