Intel Expects Significant Revenue from Contract Chip Manufacturing by 2027

by Nicholas Edwards · 04/09/2024

Intel’s CFO projects meaningful revenue from contract chip manufacturing by 2027 as the company focuses on its advanced 18A process and completes restructuring efforts.

Bollywood Fever: Intel is expected to generate substantial revenue from its contract chip manufacturing business starting in 2027, according to CFO David Zinsner, who spoke at an investor conference on Wednesday. The company is currently in discussions with 12 potential customers, with some revenue expected as early as 2026 and growing significantly the following year.

Rather than promoting its 20A manufacturing process, Intel is prioritizing its more advanced 18A process as it seeks to establish itself as a leader in contract chip manufacturing. Currently, the foundry business generates revenue primarily from its advanced packaging services.

Zinsner did not address recent reports from Reuters about Intel’s struggles to produce viable test wafers for Broadcom, one of its potential customers. However, he did discuss Intel’s broader restructuring efforts, which include a 15% workforce reduction and divestitures as part of a turnaround strategy under CEO Pat Gelsinger.

While Intel is streamlining its operations, Zinsner noted that cuts will largely be completed by the time the company reports its current quarter’s earnings. The company is also exploring various options to further align its focus on core areas.

Intel is not expected to receive substantial financial support from the U.S. CHIPS Act until late 2024, according to Zinsner. The act, designed to boost domestic chip manufacturing, will provide grants and incentives to spur industry growth in the U.S.