intel CEO Lip-Bu Tan said Monday that the company’s external manufacturing business is gaining momentum and emerging as a key part of the chipmaker’s turnaround.
“Foundries are very important,” Tan told Jim Cramer on CNBC’s “Mad Money.” “It’s one of our important national treasures.”
Intel’s manufacturing operations, known as foundries, are the most expensive and important part of the company’s turnaround strategy. The company is designed to make semiconductors for external customers while helping rebuild advanced chip production capacity in the United States, which has long been dominated overseas. Historically, Intel’s factories produced only its own chips used in personal computers and data center servers. Tan’s predecessor, Pat Gelsinger, favored an expensive external foundry strategy.
Intel’s stock price has risen more than 300% since Tan was appointed CEO in March 2025. That’s because investors are betting that the longtime semiconductor executive can stabilize the struggling semiconductor maker after years of setbacks. One of the big questions was whether Mr. Tan could achieve Intel’s foundry ambitions by making Intel’s manufacturing capabilities competitive with other companies. Taiwan Semiconductor Manufacturing Co., Ltd..
Tan said the company is starting to make concrete progress toward that goal.
Tan specifically pointed to improvements in Intel’s advanced 18A manufacturing process, which investors are watching as a key test for a turnaround. When he took office, he said the 18A process was “not good.”
Tan led chip design software maker Cadence Design Systems from 2009 to 2021 and served on Intel’s board of directors for two years, ending in 2024.
Manufacturing yield, or the percentage of usable chips produced from each wafer, is an important metric for profitability and customer confidence in foundry businesses. Tan said Intel’s progress has exceeded expectations.
“Best practice is to see yield improvements of 7% or 8% per month, and we’re seeing that right now,” he said.
Tan said the improvements are starting to attract customer interest. He said as Intel’s manufacturing performance improves, more potential customers have approached the company about using its foundry business.
On May 8, the Wall Street Journal reported that Intel and Apple had reached a tentative agreement in which Intel would produce some of Apple’s chips currently produced by TSMC. When Mr. Kramer asked Mr. Tan about these reports, the CEO declined to speak by name.
However, Tan said Intel expects commitments from multiple foundry customers in the second half of this year. “We have multiple customers working with us,” he said. We look forward to using your service.
The comments are consistent with what Intel executives have previously told investors. During the company’s April earnings call, CFO David Zinsner said Intel expects signals from external foundry customers to become “more specific” in the second half of this year and into early 2027.
Beyond Intel’s turnaround, Tan identified the foundry business as strategically important to the U.S. semiconductor supply chain. Intel has built a new factory in Arizona that uses the 18A process, but another project in Ohio is facing significant delays and is not scheduled to begin production until at least 2030.
“More than 90 percent of the most advanced processors are manufactured overseas,” he said. “So I think it’s important to bring some of that back.”
Looking further ahead, Tan said Intel’s next-generation 14A process could eventually compete with TSMC, which is widely considered a major third-party chipmaker.
“It will be at the same time as TSMC,” he said. “That’s a big, big step forward.”
