Two weeks ago, the rumor mill ramped up again about the potential restructuring of Intel Corporation (NASDAQ:INTC). The probing balloons centered around Taiwan Semiconductor Manufacturing (NYSE:TSM) and Broadcom (NASDAQ:AVGO) potentially carving up the faltering semiconductor giant.
However, in that coverage, we noted that not only is President Trump against such an idea, but that Intel has some leeway ahead with the upcoming Intel 18A rollout. TechInsights reported favorably on this cutting-edge process node for Panther Lake CPUs, stating, “In terms of performance, we believe Intel 18A is the leader.”
Most recently, both Nvidia (NASDAQ:NVDA) and Broadcom began manufacturing tests with Intel 18A, per insider sources to Reuters. Without a doubt, this could be Intel’s saving grace after having reported $19.2 billion net loss for 2024.
If tests on 18A capabilities withstand scrutiny, Intel could find a windfall in billions worth of manufacturing contracts. So far, Intel’s spokesperson avoided specifics but noted increasing interest:
“We don’t comment on specific customers but continue to see strong interest and engagement on Intel 18A across our ecosystem.”
Here is what retail investors should know about INTC stock exposure at this point in time and why 2025 could very well be the pivotal year for Intel’s comeback.
Pushing the Envelope of Miniaturization
In chip design, it’s all about performance per surface race. In other words, how many transistors can be packed into an area while delivering more computational power per watts used. In the last decade, this has become even more important as mobile devices took off.
For decades, Intel dominated the desktop CPU market (and still does), but AMD (NASDAQ:AMD) keeps gaining new market share thresholds, currently at 35.5% vs Intel’s 61.6%. AMD’s latest offering of Ryzen 9000X3D CPUs was especially well-received owing to their novel 3D stacking architecture called V-Cache.
However, although exceptionally performant, these CPUs use a hybrid approach of 4nm (N4P) for the compute die and 7nm process for the L3 cache part. Intel 18A is poised to be the world’s most advanced miniaturization effort, utilizing 1.8nm scale. For comparison, TSMC’s equivalent, also scheduled for mass volume production in 2025, is larger at 2nm.
Although TSMC started developing the 1.4nm process, it is not expected to enter commercial deployment until 2028. In the meantime, there appears to be a reversal of tech advantage. Intel’s woes effectively started with the rollout of 10nm, suffering multi-year delays as TSMC was unrolling 7nm tech.
This time around, although smaller, the advantage favors Intel over TSMC. Reminder, the main reason why Intel is so deep in the red is due to massive foundry expansion expenditures, in an effort to create equal footing with the world’s top chip manufacturing rival, TSMC.
If all goes well with the Intel 18A rollout, the company is also set to counter TSMC’s 1.4nm development with its own equivalent 14A. It appears this is the hard miniaturization ceiling this decade.
Intel Still Seems to be Rudderless
It has become common to describe Intel leadership as problematic, and the company itself suffering from “toxic work culture”. This is not that surprising given that monopolies tend to create such an effect. Moreover, SemiAnalysis pointed out that 7 out of 11 members of Intel’s board of directors lack relevant semiconductor experience.
This all culminated with the resignation of Intel CEO Pat Gelsinger in early December 2024. However, it is not clear if that was the right call. In a recent long X post, former Intel VP Raja Koduri believes that Intel deprioritized the big picture over short-term gains:
“The “spreadsheet & powerpoint snakes” – bureaucratic processes that dominate corporate decision-making – often fail to grasp the true cost of surrendering performance leadership. They optimize for minimizing quarterly losses while missing the bigger picture.”
According to Koduri, this culture overturned Intel’s semiconductor leadership, having been replaced by “’learned helplessness’ throughout the engineering ranks, stifling the very innovation culture that built Intel’s empire.”
In this light, it could be said that former Intel CEO Gelsinger did a good job by redirecting the ship despite displeasing INTC shareholders in the short-run. Semiconductor analyst Dylan Patel shares this view, pointing out that Pat Gelsinger was “the doctor trying to save the patient for years”.
In the meantime, Intel Chair Frank Yeary is at the helm, whom Patel describes as the hospital director who fires the doctor (Gelsinger) and shoots the patient (Intel).
Could Intel 18A Rollout Suffer Delays?
At this critical juncture in the company’s history, Intel 18A rollout must run as smoothly as possible. But according to Reuters, having access to supplier documentation, there may be a problem with unnamed third-party IP providers.
This has the potential to roll out 18A chips to mid-sized clients, but Intel is still adamant that mass volume production will proceed into H2 2025. For retail investors, this dynamic is a fertile ground for speculation.
Intel clearly has the tech to make a comeback, as Gelsinger pushed his initiative to “regain transistor performance and power performance leadership”. Even with slight delays (under a year), Intel would still be on par with TSMC’s cutting edge.
The new macroeconomic situation is also beneficial for Intel, as the Trump admin focuses on tariffs to onshore vital domestic industries. And there are few companies as vital as Intel for the digital age.
These factors keep driving INTC stock, having gained 20.8% value year-to-date. The present price level is aligned with WSJ’s average price target of $24.93, while the low estimate is $18 per share. Interestingly, if Intel hits all the nodes by the end of the year, INTC price should soar to $100 as the price target ceiling.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.