Intel, historically a titan of the semiconductor industry, is undergoing a seismic transformation amid intensifying competitive pressures and faltering strategic bets. The company is set to eliminate 22,000 jobs by mid-2025, reflecting both deep cost concerns and fundamental shifts in its business approach. This reduction hits manufacturing lines and middle management, underlining a broader move to rethink priorities as its ambitious foundry aspirations—intended to challenge the dominance of Taiwan´s TSMC—fall largely flat.
Intel Foundry Services (IFS), launched with the goal of attracting leading fabless chip clients and ensuring U.S. semiconductor self-sufficiency, has struggled to gain traction. Industry giants like AMD, Qualcomm, and Apple have opted to remain with TSMC or Samsung, leaving Intel facing skepticism over its dual role as both designer and manufacturer. The lack of external customers for its new fabs not only casts doubt on its foundry strategy but also forces painful job cuts and a reevaluation of its entire manufacturing philosophy. This crisis of confidence has allowed competitors like TSMC to solidify their role as essential global suppliers, while Intel’s influence wanes.
As a lifeline, Intel has pivoted under CEO Lip-Bu Tan to focus on artificial intelligence chip design and advanced R&D. Its strategy hinges on developing power-efficient accelerators and attempting to close the ever-widening gap with Nvidia, which now commands 82% of the artificial intelligence chip market. Intel’s future may rest on its forthcoming 18A process node, leveraging advanced gate-all-around transistor technology. However, the company’s previous delays in reaching critical technology milestones—like its troubled 10nm and 7nm launches—raise serious questions about its ability to execute on time. If Intel stumbles on the rollout of 18A, it risks sliding further behind not only technologically but also in its contribution to U.S. technology and economic security. The consequences extend far beyond corporate performance, undermining national ambitions for semiconductor independence in a geopolitically sensitive sector.
