Intel CEO Lip-Bu Tan Explores Major Shift in Chip Manufacturing Strategy

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A Big Change at Intel

Lip-Bu Tan, the recently appointed Intel CEO, is already stirring change. He’s now exploring a major shift in Intel’s chip manufacturing strategy, which could reshape not just Intel’s operations but also its position in the global semiconductor race.

But what exactly is changing?

Instead of sticking strictly to in-house chip production, Tan is considering expanding Intel’s outsourcing efforts, working more closely with global contract manufacturers like TSMC and Samsung. This approach could help reduce costs and speed up chip development.

Why Is Intel Rethinking Its Approach?

The chip industry is under pressure from multiple directions:

  • Soaring development costs
  • A race to smaller, more efficient nodes
  • Global supply chain risks
  • Geopolitical tension, especially between the US and China

Intel’s rivals, particularly NVIDIA (NVIDIA) and AMD, have already leaned into fabless models, relying on third-party fabs to stay competitive. Tan seems to believe it’s time for Intel to do the same, at least partially.

“We need to be agile and responsive to market realities,” Tan said during a recent strategy call with investors.

What Is Intel Actually Considering?

Under Tan’s direction, Intel is reviewing several strategic options:

  • Outsourcing advanced chips to foundries in Asia
  • Spinning off or restructuring Intel Foundry Services (IFS) to operate more independently
  • Licensing key chip technologies to external players for faster scaling
  • Reducing internal production for low-margin chips to cut costs

These aren’t just minor adjustments. Analysts say this could be Intel’s biggest restructuring since the early 2000s.

Rethinking the Future of 18A Technology

One of the most striking parts of Intel CEO Lip-Bu Tan’s strategy review is the internal debate over Intel’s 18A process. This next-generation technology, designed with RibbonFET and PowerVia innovations, was once positioned as Intel’s answer to TSMC’s most advanced chips.

But why the hesitation now?

Tan is reportedly exploring whether to scale back 18A development for external clients. While Intel still plans to use 18A internally, sources suggest there’s a growing push to prioritize the 14A process instead. This move could help streamline costs and respond better to feedback from key customers like Microsoft and Amazon, who have been cautious about adopting the 18A platform.

Will 18A Still Define Intel’s Future?

This change could mark a significant shift in Intel’s foundry ambitions. While 18A was once a centerpiece of Intel’s comeback plan, the current leadership seems focused on practical execution over bold promises. If Tan chooses to delay or limit 18A for external sales, it may affect Intel’s role in the cutting-edge chip market.

Still, experts say the technology isn’t going away; it may just be used more strategically within Intel’s own product lines, like Panther Lake and future data center chips.

What Could This Mean for the US Chip Market?

That’s the big question. Intel has long been considered the backbone of American chipmaking. If it moves more of its production overseas or shifts toward a hybrid model, it may affect:

  • Domestic job growth
  • Federal chip incentives under the CHIPS and Science Act
  • Intel’s role as a national security asset

Still, supporters argue that a leaner Intel could better compete in a fast-changing global market.

Industry Reaction So Far

Reactions have been mixed. Investors welcomed the idea, with Intel shares (INTC) rising after early reports of the strategy shift. But some US policymakers have expressed concern that outsourcing could reduce America’s chip independence.

Tech analyst Mark Li commented:

“Intel CEO Lip-Bu Tan is walking a fine line between innovation and national responsibility. But he’s not wrong to rethink the status quo.”

What Happens Next?

Intel hasn’t officially confirmed all changes yet, but internal reviews are underway. If approved, Tan’s plan could roll out in early 2026, starting with specific product lines.

Will this make Intel stronger?

Only time will tell. But what’s clear is that the new Intel CEO is willing to take bold steps to secure the company’s future in a highly competitive market.

Disclaimer

This content is for informational purposes only and not financial advice. Always conduct your research.