March 4 (Reuters) – Intel CEO Lip-Bu Tan is now starting to recognize its 18A manufacturing technology as a potential offering for external clients after relegating it largely to internal use last year, Chief Financial Officer David Zinsner said on Wednesday during a tech conference in San Francisco.
This could mark a reversal from a major facet of Tan’s turnaround strategy set out last year, when he said he believes Intel’s so-called 18A manufacturing process — in which his predecessor Pat Gelsinger had deeply invested — could generate a reasonable return only if it is used for Intel’s own products.
Shares of the company were up about 6% amid a broader uptick across chip stocks.
“While Lip-Bu was … thinking that we probably should focus on 14A as a foundry node and make 18A really just an internal node, now that we’ve got seen some real progress there, I think he’s now starting to recognize that this is actually a good node to offer to external customers as well,” Zinsner said at the Morgan Stanley Technology, Media and Telecom conference on Wednesday.
Reuters has reported that only a small percentage of the chips printed via 18A have been good enough to make available to customers. Intel has said its yields, or the number of good chips per silicon wafer, are improving monthly. Weak yields also routinely pressure margins.
Since his appointment as CEO, Tan has made big changes to Intel. Last year, Intel cut roughly 20% of its workforce as Tan reshaped the company’s strategy to tackle artificial intelligence.
Tan has also vowed to continue to operate Intel’s factories and pursue new customers for its next-generation manufacturing tech called 14A.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Alan Barona)
Comments