Analysis of the Impact of Intel's 18A Process Volume Production on Turning Its Foundry Business to Profit

Based on the collected data, I now present a systematic and comprehensive analysis report for you.

---

Based on the latest financial data and market analysis, Intel’s foundry business is facing a loss of approximately 58 cents per dollar of revenue, and it is expected to take until 2027 to break even [0][1].

---

According to Intel’s Q3 2025 earnings report (10-Q filing) [0] and industry analysis [1]:

Time Period	Revenue	Operating Loss	Loss/Revenue Ratio
First 9 months of 2025	$13B	$8B	61.5%
Q3 2025	$4.24B	$2.3B	54.2%
Full Year 2024	-	Billions of USD	Sustained Losses

• Intel’s overall operating income in Q3 2025 was $683 million, but the foundry business alone remained in a state of severe losses [0]
• Intel’s capital expenditures reached $25-$28 billion in 2024, mainly used for advanced process fab construction [1]
• The company’s net profit in the first 9 months of 2025 was $359 million, which was mainly achieved through proceeds from asset disposals (such as the Altera divestiture) [0]

1. Insufficient Capacity Utilization
   : Advanced process fabs are in the ramp-up phase, making it difficult to allocate fixed costs
2. Weak Customer Base
   : External customer orders are limited, and internal product migration is lagging
3. Competitive Pricing Pressure
   : Low-price strategies are needed to attract customers, further compressing profit margins
4. Huge Depreciation and Amortization
   : Investment in advanced process equipment is substantial, which continuously erodes profits during the depreciation period

---

According to market reports [2][3]:

Metric	Intel 18A	TSMC 2nm
Volume Production Time	January 2025 (Fab 52, Arizona)	2026 (planned)
Performance Improvement	25% performance increase or 36% power reduction compared to Intel 3nm	10-15% performance increase, 30% power reduction compared to 3nm
Transistor Density	Industry-leading	~100-120 MTr/mm²
Yield (Q3 2025)	55%	Expected 60%
Foundry Quotation	~$20,000 per wafer	~$25,000 per wafer (estimated)

• RibbonFET (Gate-All-Around Transistor)
  : Intel’s first introduction in a foundry node
• PowerVia (Backside Power Delivery)
  : Industry-first technology that optimizes power delivery
• Foveros Direct 3D & EMIB 3.5D
  : Advanced packaging technologies

---

Customer	Chip Type	Deal Scale	Status
Microsoft	Custom Chips	$15 billion lifetime value	Design locked, volume production in 2025
Amazon AWS	Custom Graviton	Billions of USD	Evaluation and design phase
Apple	Entry-level M-series	Potential partnership	Considering adoption in 2027

According to industry reports [4], Intel is facing significant resistance in acquiring foundry customers:

1. Nvidia Suspends Testing
   : Has halted 18A process testing and production plan evaluation, which is a major blow to Intel
2. Broadcom Did Not Place Orders After Evaluation
   : Neither of the two major AI chip design giants has confirmed orders
3. Customer Structure Issues
   : Current customers are mostly small and medium-sized design companies, lacking high-margin orders such as AI accelerators

---

• Revenue Growth
  : With the ramp-up of 18A capacity, foundry revenue is expected to grow by more than 50% in 2026
• Improved Capacity Utilization
  : Capacity release from Fab 52 improves fixed cost allocation
• Customer Expansion
  : Potential customers such as Apple and Google join
• Break-even Timeline
  : Achieve positive operating profit margin for the foundry business in 2027

Risk Type	Details	Impact Level
Technology Risk	Yield ramp-up falls short of expectations (current 55%)	High
Market Risk	Unable to compete with TSMC for AI chip orders	High
Financial Risk	Sustained losses consume cash reserves	Medium
Policy Risk	Uncertainty regarding CHIPS Act subsidies	Low

1. Customer Diversification
   : Secure orders from at least 3 top-tier chip design companies
2. Yield Improvement
   : Reach over 70% by the end of 2026
3. Capacity Utilization
   : Reach over 60%
4. Order Backlog
   : Lifetime value exceeds $30 billion

---

According to the latest market data [0]:

Time Period	Price Change
Past 6 Months	+93.89%
Past 1 Year	+113.17%
Current Price	$42.66
Market Capitalization	$187.59B

• Bullish View
  : Forbes analysis suggests that the success of the foundry business could push the valuation to $60-$65 per share [2]
• Bearish View
  : The consensus target price among analysts is only $39.00 per share (8.6% discount to the current price) [0]
• Rating Distribution
  : Buy 31.3%, Hold 54.2%, Sell 14.5% [0]

---

The volume production of Intel’s 18A process marks a major breakthrough in its foundry business, but

:

Phase	Timeframe	Expected Progress
Capacity Ramp-Up Phase	2025	Gradual improvement in capacity utilization
Customer Expansion Phase	2025-2026	More external customers place orders
Break-Even Phase	2027	Positive operating profit for the foundry business
Scale Effect Phase	After 2027	Cost advantages emerge, profitability improves

: The positive impact of 18A volume production has been partially priced in by the market; focus on actual yield data and customer order announcements

: The key observation period is 2026; the progress of capacity expansion and customer acquisition will determine the loss reversal timeline

: If the 18A process successfully attracts AI chip orders, the foundry business is expected to become Intel’s second growth curve

---

[0] Intel Corporation 10-Q Filing (Q3 FY2025), SEC.gov, https://www.sec.gov/Archives/edgar/data/50863/000005086325000179/intc-20250927.htm

[1] “The Physics of Money: Why TSMC Has Won the AI War”, StayingRational Substack, https://stayingrational.substack.com/p/the-physics-of-money-why-tsmc-has

[2] “The Silicon Renaissance: Intel Reclaims the Throne as 18A Enters High Volume Production”, FinancialContent Markets, https://markets.financialcontent.com/wral/article/tokenring-2026-1-5-the-silicon-renaissance-intel-reclaims-the-throne-as-18a-enters-high-volume-production

[3] “Intel’s Foundry Strategy Under Scrutiny Amid Nvidia’s 18A Testing Halt”, AInvest, https://www.ainvest.com/news/intel-foundry-strategy-scrutiny-nvidia-18a-testing-halt-2512/

[4] “How Intel Stock Can Jump 50%”, Forbes, https://www.forbes.com/sites/greatspeculations/2025/12/11/how-intel-stock-can-jump-50/