Intel (INTC, Financial) CEO David Zinsner is considering significant changes to the company's contract manufacturing business. There is a possibility that Intel's "foundry" services may stop promoting certain chip manufacturing technologies, specifically the 18A process, to external customers. Reports indicate that the 18A manufacturing process, heavily promoted by former CEO Pat Gelsinger, is losing appeal among new clients. If Intel decides to halt external sales of the 18A process and its variant 18A-P, this could lead to asset impairments potentially worth billions.
Zinsner has instructed the company to prepare options for discussion in this month's board meeting, including whether to cease promoting the 18A process. Due to the complexity and financial implications, a final decision may not be made until subsequent meetings later this year. Industry analysts project the impairment could range from hundreds of millions to billions of dollars. Additionally, Zinsner plans to allocate more resources to the next-generation 14A chip manufacturing process to secure clients like Apple (AAPL) and Nvidia (NVDA), as Intel aims to remain competitive against TSMC (TSM).
