Analysis of Intel Foundry Business Investment and TSMC 3nm Capacity Allocation

According to the latest information, NVIDIA invested

in Intel in September 2025 [1], not $5 billion. This investment is one of the series of external funds Intel has received recently:

• U.S. Government Investment
  : In August 2025, the U.S. government invested $8.8 billion in Intel through grants under the CHIPS Act framework, acquiring a 10% stake in the company [1]
• SoftBank Investment
  : A few days before NVIDIA’s investment, SoftBank invested $2 billion in Intel [1]
• NVIDIA Investment
  : $500 million, but
  did not commit to using Intel’s foundries
  , only agreed to use certain technologies from Intel [1]

From the perspective of TSMC’s 3nm process capacity allocation, the industry pattern shows the following characteristics:

• Apple
  is TSMC’s largest 3nm customer, taking most of the initial capacity
• NVIDIA and AMD
  are the other two major customers
• Intel
  has a relatively small share in TSMC’s 3nm capacity
• Samsung
  , as a foundry competitor, also faces capacity pressure

TSMC’s 3nm capacity remains tight, mainly due to the following reasons:

• Surge in demand for AI chips (such as NVIDIA H200 chips)
• Strong demand for high-performance computing chips
• Long yield ramp-up cycle for advanced processes

1. Technological Progress
   : Intel’s 18A process has entered mass production at the new Fab 52 factory in Arizona [1]

2. Financial Support
   : Received a total of approximately $11.5 billion in external investment (government $8.8b + SoftBank $2b + NVIDIA $500m)

3. Strategic Cooperation
   : Signed a $14 billion cooperation agreement with India’s Tata Electronics [2]

1. Difficulty in Customer Acquisition
   :
   • Currently,
     no major external customers
     have signed long-term foundry agreements [1]
   • NVIDIA invested but did not commit to using Intel’s foundries

2. Lack of Economies of Scale
   :
   • Foundry business needs a large number of external customers to be profitable
   • Lack of scale effect will continue to lead to losses

3. Technological Gap
   :
   • TSMC leads Intel by about 2-3 years in advanced processes
   • TSMC’s 2nm process is only produced locally in Taiwan [1]

4. Market Competition
   :
   • TSMC has formed mass production in the 4nm process
   • Samsung is also actively competing for foundry orders

1. TSMC’s 3nm capacity allocation pattern indicates that Intel’s competitiveness at this process node is limited
2. Major AI chip manufacturers (NVIDIA, AMD) still prioritize TSMC
3. Intel’s foundry business break-even target is set for 2027 [2]

1. If Intel can continuously improve yield and reduce costs, it may attract some customers
2. Geopolitical factors may promote supply chain diversification, creating opportunities for Intel
3. If the 18A process can reach the same technical level as TSMC, it may become a turning point

• Whether to acquire the first major external customer
• Capacity utilization and yield improvement
• Time point of narrowing losses

Overall, although Intel has received significant investment support, from the reality of TSMC’s 3nm capacity allocation, Intel’s foundry business has limited possibility of achieving major breakthroughs in the short term. The success of this business will highly depend on the improvement of technical level and the acquisition of major customers.

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[1] CNBC - “Inside Intel’s new Arizona fab, where the chipmaker’s fate hangs in the balance” (https://www.cnbc.com/2025/12/19/intel-aims-to-find-clients-and-catch-tsmc-with-new-chip-fab-in-arizona.html)
[2] Notebookcheck - “Intel signs $14 billion deal with India’s Tata Electronics” (https://www.notebookcheck.net/Intel-signs-14-billion-deal-with-India-s-Tata-Electronics.1180876.0.html)