TLDR:
- Intel has begun “risk production” on its new 18A chip-manufacturing process
- New CEO Lip-Bu Tan wants Intel to adopt a startup mentality focused on engineering
- Intel plans to start manufacturing next-generation Panther Lake processors in second half of 2025
- Wall Street analysts remain cautious, saying the company faces a long recovery
- Intel stock has given up most gains it saw after the CEO announcement last month
Intel’s new CEO Lip-Bu Tan laid out his strategy for turning around the struggling chipmaker while the company announced a key production milestone for its advanced manufacturing technology.
Tan, who has only been in the role for two weeks, spoke at the Intel Vision 2025 conference in Las Vegas on Monday. He emphasized that his top priority has been spending time with customers.
“Under my leadership, Intel will be an engineering-focused company,” Tan said. “We will listen closely and act on your input. Most importantly, we will create products that solve your problems and drive your success.”
The new CEO wants to transform Intel’s culture to be more innovative and nimble. His plan includes designing purpose-built chips to enable key workloads for customers.
Manufacturing Milestone Reached
In a potentially important development for Intel’s recovery efforts, company executives announced Tuesday that they have begun “risk production” on their new 18A chip-manufacturing process.
This step involves low-volume testing of the manufacturing technology before scaling up to larger production runs. Intel has claimed its 18A process could give it a technological edge against rival Taiwan Semiconductor Manufacturing.
The company plans to start manufacturing its next-generation Panther Lake processors on the 18A process in the second half of this year. This timeline is seen as a crucial milestone for ramping up production volumes.
“The 2H roll-out of Panther Lake seems to be a necessary milestone to hit, in order to get volumes ramping and is a key timeline metric we now know to watch,” wrote Stifel analyst Ruben Roy in a research note.
Wall Street Remains Cautious
Despite the manufacturing progress and new leadership, analysts maintain a cautious outlook on Intel’s recovery prospects.
Bernstein analyst Stacy Rasgon described Tan’s speech as sounding “more like an apology than anything else” and noted it was “lighter on details than some might have hoped.”
Rasgon, who rates Intel stock as market perform with a price target of $25, added: “It seems clear they are in for a slog as he tries to fix a myriad of issues around product and process, and attract and satisfy customers, all while delivering a massively needed cultural shift.”
Truist Securities analyst William Stein was more positive, calling it “the most constructive message we’ve heard from Intel in… for as long as we’ve covered the company.” Still, Stein maintained a hold rating with a $21 price target.
The key question for Intel now is whether it can attract external customers for its 18A manufacturing process. According to previous reports, Nvidia and Broadcom are running tests on the process.
Investors may learn more at the company’s Foundry Direct Connect event on April 29, where additional details about the turnaround strategy are expected.
Tan also mentioned plans to strengthen Intel’s balance sheet but didn’t offer specifics. Some analysts speculate that Intel could sell its investments in Altera and Mobileye.
Intel stock has struggled recently, dropping 2.9% to close at $22.05 on Tuesday. While shares are up 10% year-to-date, they plunged 60.1% last year.
The stock was down another 0.7% in premarket trading Wednesday, continuing a 6% decline over the previous five trading sessions. This leaves the share price close to where it was before the announcement of Tan’s appointment triggered a brief rally last month.
Evercore ISI analyst Mark Lipacis, who maintains an in-line rating with a $27 price target, summed up the challenge ahead: “Fixing a 110,000-employee organizational culture is no small task and will likely require at least several quarters for any measurable results.”
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