November 20, 2025 – Intel (NASDAQ: INTC) found itself as a bottom performer in the stock market today, with shares trading down by approximately 2-3% by early afternoon. This decline comes despite a year that has otherwise seen the semiconductor giant rally roughly 75% year-to-date. The immediate catalyst for today's downturn is a newly circulated research note from Citi, casting significant doubt on the viability and impact of Intel's ambitious foundry strategy. This skepticism highlights the market's acute focus on Intel's ability to execute its turnaround plan, particularly in the capital-intensive and highly competitive advanced manufacturing sector.
The market's reaction underscores a broader narrative: while the semiconductor industry is experiencing a robust boom driven by insatiable demand for AI and high-performance computing, Intel's specific execution challenges, especially in its Intel Foundry Services (IFS) division, continue to fuel investor caution. The questions raised by Citi's report touch upon the very core of Intel's IDM 2.0 strategy, suggesting that the path to reclaiming manufacturing leadership and securing lucrative external foundry customers remains fraught with technical and financial hurdles.
Deep Dive into Intel's Foundry Crossroads
Citi's research note, circulated around November 20, 2025, delivered a significant blow to market sentiment regarding Intel's foundry business. Led by analyst Christopher Danely, the report acknowledged that major chipmakers like Qualcomm, Apple, and Broadcom were reportedly evaluating Intel Foundry (IFS) for their data center ASIC businesses. However, the note critically emphasized that any potential engagements would likely be confined to advanced packaging technologies, such as Intel's Embedded Multi-Die Interconnect Bridge (EMIB), rather than full front-end wafer fabrication. Citi analysts expressed strong doubts that these packaging-centric deals would translate into substantial revenue or profit for IFS, citing the lower margins typically associated with packaging services compared to full foundry work. The report also pointed to the small contribution of data center ASICs to Intel's overall sales, further dampening expectations for a material revenue boost. Citi maintained a "Sell" rating on Intel (NASDAQ: INTC), reiterating its belief that the company remains "far behind TSMC" in foundry technology.
Further fueling skepticism, Citi's note also cited "industry feedback that Nvidia abandoned a packaging project with Intel due to technical issues." This detail suggests an earlier, direct collaboration that failed to materialize. This comes despite a seemingly contradictory, more recent development from September 2025, where Nvidia (NASDAQ: NVDA) announced a strategic partnership with Intel involving a $5 billion investment. This broader collaboration outlines that Intel Foundry would supply central processors and advanced packaging (including Foveros 3D and EMIB technologies) for jointly developed AI infrastructure and personal computing products, projected to launch in late 2027 or early 2028. Nvidia CEO Jensen Huang clarified that this partnership does not alter Nvidia's existing manufacturing relationship with TSMC (NYSE: TSM) for its primary GPU production, but rather focuses on new co-designed solutions. This nuanced situation suggests a complex relationship where past technical hurdles may have led to the abandonment of a standalone project, even as a new, broader strategic alliance takes shape.
Intel's IDM 2.0 strategy, unveiled by then-CEO Pat Gelsinger on March 23, 2021, is built on three pillars: leveraging internal manufacturing, utilizing external foundries, and establishing Intel Foundry Services (IFS). A cornerstone of this strategy is the ambitious "five nodes in four years" plan, aiming for process technology leadership by 2025. The company has since commercialized Intel 7, Intel 4, and Intel 3. Its Intel 20A (Angstrom era) node, featuring RibbonFET and PowerVia, was targeted for 2024 and is used for Arrow Lake PC chips. The critical Intel 18A node, initially slated for early 2025, was pulled forward for volume manufacturing in late 2024, with Intel aiming for "process performance leadership" by 2025. Microsoft (NASDAQ: MSFT) has committed to producing a chip design on the Intel 18A process, a significant validation. However, leadership instability has impacted the IDM 2.0 strategy, with Pat Gelsinger reportedly ousted in December 2024 and Lip-Bu Tan taking over as CEO in March 2025, a move that could lead to an overhaul of the current approach.
Intel faces an uphill battle against industry giants. In the foundry market, TSMC (NYSE: TSM) remains the undisputed leader, commanding over 70% of the global market in Q2 2025, with over 90% share in advanced 3nm and 2nm technology. TSMC plans mass production of its 2nm process in late 2025, reportedly with 60% yields by June 2025. Samsung Foundry, a distant second with 7.3% market share in Q2 2025, is aggressively pursuing 2nm technology with Gate-All-Around (GAA) architecture. Intel Foundry Services (IFS), despite billions in investment, holds a much smaller market share and reported an operating loss of $3.17 billion in Q2 2025. Intel's claim of 2nm mass production with Panther Lake in October 2025 contrasts with earlier reports estimating 18A yields at 20-30%, significantly lower than TSMC's. In the CPU market, Intel (NASDAQ: INTC) continues to lose market share to AMD (NASDAQ: AMD) and Arm (NASDAQ: ARM) across PC and server segments, with its x86 server processor share declining to 72.7% in Q2 2025 from 94.2% in Q2 2020. Overall, Intel reported an $11.6 billion net loss for the full year 2024, with its foundry business incurring over $13.4 billion in losses.
The Ripple Effect: Winners and Losers in the Semiconductor Arena
Intel's (NASDAQ: INTC) ongoing stock market underperformance and the persistent skepticism surrounding its Intel Foundry Services (IFS) strategy are creating significant ripples across the semiconductor industry, impacting key public companies like TSMC (NYSE: TSM), Samsung Foundry, AMD (NASDAQ: AMD), and Nvidia (NASDAQ: NVDA). As of November 2025, while Intel faces considerable challenges, its efforts to pivot and regain manufacturing prowess also present a complex landscape of potential wins and losses for itself and its rivals.
For Intel (NASDAQ: INTC) itself, the stakes are incredibly high. The company's stock has seen a significant decline, dropping over 60% in 2024 with continued underperformance into 2025. The IFS division, a cornerstone of its IDM 2.0 strategy, was unprofitable, burning over $13.4 billion in 2024, and reported a $2.3 billion operating loss in Q3 2025 alone. As of July 2025, Intel had not secured a major external customer for its existing manufacturing nodes, raising doubts about its multi-billion-dollar foundry pivot. Despite these setbacks, Intel is pushing forward with its 18A node, with volume shipments anticipated in early 2026, and has received substantial financial backing, including funds from the U.S. CHIPS Act, a $2.0 billion investment from SoftBank, and a $5.0 billion investment from Nvidia. These investments are critical for Intel's long-term manufacturing goals and its attempted turnaround.
TSMC (NYSE: TSM) stands out as a significant beneficiary from Intel's prolonged struggles and the overall surging demand for advanced semiconductors, particularly for AI. As of Q2 2025, TSMC commanded over 70% of the global foundry market share, with revenue surging 41% year-over-year in Q3 2025, primarily driven by strong demand in AI and high-performance computing (HPC). TSMC leads in cutting-edge chip technology, producing chips on 3nm and 5nm nodes and transitioning to 2nm in 2025. Its advanced packaging technologies (CoWoS and 3DFabric) are crucial for AI chips, with capacity largely booked through 2025 and into 2026, strengthening TSMC's economic position and acting as a bottleneck for the entire AI industry.
Samsung Foundry, while currently a distant second to TSMC with only 7.3% of the global foundry market in Q2 2025, is showing signs of a turnaround. Samsung aims to regain market share in the 2nm era, where it holds a potential advantage with its prior experience in Gate-All-Around (GAA) architecture, which TSMC is adopting for the first time at 2nm. The company has secured significant new 2nm chip production orders, including from Chinese cryptocurrency mining firms MicroBT and Canaan, and a multibillion-dollar deal with Tesla (NASDAQ: TSLA). Samsung's foundry division's operating losses "narrowed significantly" in Q3 2025, and it aims for profitability by 2027, targeting a 20% market share by revenue within the same timeframe.
AMD (NASDAQ: AMD) is a clear winner from Intel's CPU struggles, continuing to gain significant x86 CPU market share across desktop, mobile, and server segments. AMD has set ambitious targets to exceed 50% server CPU revenue market share and 40% client CPU revenue market share in the coming years. In the rapidly expanding AI market, AMD is positioning itself as a formidable competitor. Its partnership with OpenAI, announced in late 2025, is considered a "watershed moment" for AMD in the AI accelerator market, with an estimated value of $80-100 billion through 2030. However, AMD faces a new competitive challenge from the strategic partnership and $5 billion investment between Intel and Nvidia, announced in mid-September 2025.
Nvidia (NASDAQ: NVDA) remains the undisputed leader in the generative AI hardware market, with its GPUs powering most AI workloads. The company reported blockbuster Q3 2025 revenue of $57 billion (up 62% year-over-year), with data center revenue hitting $51.2 billion, exceeding forecasts. While Nvidia's success is largely independent of Intel's CPU performance, Intel's challenges in foundry services do play a role in Nvidia's supply chain strategy. Nvidia's $5 billion investment in Intel highlights a recognition of the need for diversified foundry capacity. This partnership, while beneficial to Intel's x86 ecosystem and AI strategy, is seen as more advantageous for Nvidia and TSMC, as Intel may not reap significant margins from producing those chips.
Broader Implications: Geopolitics, AI, and the Manufacturing Race
Intel's (NASDAQ: INTC) current foundry struggles and the skepticism surrounding its manufacturing ambitions carry significant wider implications, touching upon global industry trends like surging AI demand, critical geopolitical considerations, and the intense race for semiconductor manufacturing leadership. As of November 2025, Intel's challenges are creating ripple effects across competitors, partners, and policy, while echoing historical shifts in the semiconductor industry.
The demand for artificial intelligence (AI) and high-performance computing (HPC) is a dominant force shaping the semiconductor industry in 2025. These segments are the primary catalysts for market growth, with the overall semiconductor market projected to grow by 15% in 2025. AI accelerators alone constituted approximately 20% of the total semiconductor market in 2024, a share that continues to rise in 2025. This surge necessitates specialized neural processing units (NPUs), high-performance graphics processing units (GPUs), and high-bandwidth memory (HBM). The industry is rapidly advancing towards smaller process nodes (below 20nm) to meet these complex demands. Even leading foundries like TSMC (NYSE: TSM) are struggling to keep up, doubling their CoWoS (Chip-on-Wafer-on-Substrate) advanced packaging capacity for 2025, yet AI demand still outpaces supply.
Geopolitics has transformed the semiconductor industry into a "hotly contested arena." A notable shift from globalization to "technonationalism" is underway, with major nations like the U.S., EU, and various Asian countries heavily investing in domestic manufacturing capabilities. The intensifying rivalry between the U.S. and China, characterized by stringent U.S. export controls on advanced semiconductor technology, significantly impacts global supply chains and limits China's access to cutting-edge chips. TSMC (NYSE: TSM) remains a critical player, producing over 60% of the world's semiconductors and more than 90% of the most advanced chips, making the geopolitical stability of Taiwan a paramount concern for the global tech supply. These tensions are leading to a fragmentation of global supply chains into regional manufacturing ecosystems.
The race for semiconductor manufacturing leadership is primarily between TSMC (NYSE: TSM), Samsung (KRX: 005930), and Intel (NASDAQ: INTC). TSMC currently dominates the pure-play foundry market, holding over 50% market share (specifically 56% as of October 2025). Samsung follows with a 20% share, while Intel lags at around 10% foundry market share. All three companies are striving to achieve mass production at the 2nm node in 2025. TSMC continues to lead in process node innovation, offering advanced 3nm and N2 FinFET processes, and plans for A16 (1.6nm) by 2026. Samsung is aggressively pursuing Gate-All-Around (GAA) technology. Intel is pushing its 18A (1.8nm class) node, featuring new RibbonFET and PowerVia technologies, in its bid to regain process leadership.
Intel's manufacturing struggles present both opportunities and challenges for its competitors and partners. TSMC and Samsung stand to solidify their dominance, particularly as demand for advanced nodes from AI companies intensifies. Fabless competitors like AMD (NASDAQ: AMD), which relies on TSMC for its chip production, have already gained market share. Interestingly, the severe industry-wide shortage of advanced manufacturing capacity, exacerbated by AI demand, is prompting strategic moves even among competitors. Nvidia (NASDAQ: NVDA), a leader in AI chips, invested $5 billion in Intel and is planning collaborations, potentially seeking to diversify its supply chain away from its near-total dependence on TSMC. This highlights a critical need for alternative foundry capacity, which Intel hopes to fulfill. For its partners, Intel Foundry Services has secured a significant deal with Amazon (NASDAQ: AMZN) to manufacture custom server devices starting in 2025, signaling some customer confidence despite its ongoing yield challenges.
The CHIPS and Science Act in the U.S. (passed in 2022) is a cornerstone policy aimed at boosting domestic semiconductor manufacturing and reducing reliance on foreign supply chains. Intel (NASDAQ: INTC) is the primary beneficiary of this act, having been awarded an estimated $8.5 billion to $11.1 billion in federal support to construct new fabrication facilities in the U.S. However, the effectiveness of the CHIPS Act is under scrutiny, given that domestic chip production in the U.S. is estimated to be 30% or more expensive than in TSMC's (NYSE: TSM) Taiwan fabs. A bipartisan bill was introduced in the House that would prevent recipients of CHIPS Act grants from purchasing Chinese chipmaking equipment for a decade, further underscoring the U.S.'s decoupling efforts from China in critical technology sectors.
Intel's current struggles draw parallels with past periods of significant disruption and shifts in semiconductor leadership. A notable comparison is to the 1980s, when Intel faced intense competition from Japanese companies in the memory chip market, leading to substantial layoffs and a pivot to microprocessors. Another critical historical "misstep" for Intel was its decision not to develop chips for the iPhone, missing out on the mobile revolution and allowing competitors and fabless companies to gain significant ground. Intel's current IDM 2.0 strategy, involving expanding its foundry services to build chips for external customers, can be seen as an attempt to adapt to this model, mirroring a strategy that TSMC perfected decades ago.
What Comes Next for Intel and the Semiconductor Market
The future outlook for Intel (NASDAQ: INTC) and the broader semiconductor market, as of November 2025, is characterized by significant opportunities driven by emerging technologies, alongside formidable challenges stemming from intense competition, geopolitical dynamics, and the immense capital requirements of advanced manufacturing. Intel, in particular, is navigating a critical period of strategic transformation with its IDM 2.0 strategy, facing skepticism regarding its foundry ambitions while simultaneously making strides in regaining technological leadership and securing key partnerships.
In the short term (2025-2026), Intel is focused on operational discipline and executing its strategic initiatives. The company plans to achieve $10 billion in cost savings by 2025, including a 15% workforce reduction, and reduce capital expenditures by $10 billion annually by 2026. The 18A manufacturing process is crucial for Intel's revival, slated for 2025, with the goal of achieving process leadership by year-end. Panther Lake, the first client processor built on the 18A node, is scheduled for late 2025. Intel aims for 18A yield rates to reach 50% for high-volume production by Q4 2025. Despite skepticism, Intel Foundry Services (IFS) showed early traction with a 3% year-over-year revenue increase to $4.4 billion in Q2 2025. Intel has secured Microsoft (NASDAQ: MSFT) as a key customer for its 18A process and is reportedly in early-stage talks with AMD (NASDAQ: AMD). A significant $5 billion investment and partnership with Nvidia (NASDAQ: NVDA) further bolster its position within the AI ecosystem.
Longer term (2027-2030 and beyond), Intel's future hinges on the success of its IDM 2.0 strategy. The goal is for IFS to break even by 2027, with a long-term target of 60% gross margin and 40% operating profit. Success in securing major external customers for its advanced nodes will be crucial for validating its foundry capabilities and diversifying revenue streams. Intel aims to become a leading global foundry and a critical "Western alternative" to Asian semiconductor dependence. Building on the 18A node, Intel aims to maintain its regained process technology leadership beyond 2025 and expand its AI ecosystem. With substantial government backing from the CHIPS Act, Intel is positioned to significantly increase domestic semiconductor manufacturing capacity in the U.S. and Europe, aligning with national security priorities.
Intel has already initiated several strategic pivots and will need to continue adapting. Under new CEO Lip-Bu Tan (appointed March 2025), Intel is prioritizing a cultural shift towards an engineer-focused, customer-centric approach, simplifying its product portfolio, reducing bureaucracy, and fostering greater ownership. It is strategically reducing and reallocating capital expenditures, tying future foundry investments to confirmed customer demand. To compete with established leaders, Intel needs to continuously differentiate its AI offerings, focusing on full-stack AI solutions and leveraging its x86 ecosystem. A notable adaptation is Intel's pivot to offer custom chip solutions, particularly in China, using a "menu-style model" to meet specific local needs.
Intel can capitalize on the broader market opportunities, especially the "AI Everywhere" trend, with its focus on AI PCs, server AI processors, and Arc GPUs. The industry-wide bottleneck in advanced manufacturing capacity from dominant foundries like TSMC (NYSE: TSM) presents a significant opportunity for Intel's foundry business to attract new customers seeking supply chain diversification. Geopolitical tailwinds, including government incentives and the strategic imperative for domestic chip production, provide substantial financial and political backing for Intel's manufacturing expansion. However, Intel also faces intense competition from TSMC and Samsung in foundry services, Nvidia in high-performance GPUs, and AMD and Arm in CPUs. The massive capital required for advanced manufacturing remains a significant financial risk, and talent acquisition is an ongoing challenge.
A High-Stakes Turnaround: The Road Ahead for Intel
Intel's (NASDAQ: INTC) current stock market underperformance and the skepticism surrounding its foundry strategy are symptomatic of a company in the midst of a high-stakes, multi-year transformation. The past few years have highlighted Intel's manufacturing missteps, leading to significant market share erosion and investor doubt. However, the company is now aggressively pursuing its IDM 2.0 strategy, aiming to reclaim process technology leadership and establish a viable foundry business. This turnaround is not just critical for Intel's future but also holds profound implications for the global semiconductor supply chain and national security.
Key Takeaways: Intel's financial performance has been challenged, with revenue declines and profitability struggles. The Intel Foundry Services (IFS) division, while showing nascent signs of customer interest (e.g., Microsoft, Nvidia), remains unprofitable and a significant drain on resources. Skepticism persists regarding its ability to achieve competitive yields and attract high-volume external customers, especially given the dominance of TSMC (NYSE: TSM). However, under new leadership, Intel is undergoing a radical restructuring, with aggressive cost-cutting measures, strategic capital allocation, and substantial government and partner investments aimed at de-risking its foundry ambitions.
Market Moving Forward: The broader semiconductor industry is poised for robust growth, driven primarily by AI, automotive, and industrial electronics. This creates a fertile ground for Intel if it can execute its strategy effectively. Intel's push into AI PCs and server AI processors, coupled with its advanced packaging capabilities, positions it to capture a share of this booming market. The geopolitical imperative for diversified and localized chip manufacturing, reinforced by initiatives like the U.S. CHIPS Act, provides a strategic tailwind for Intel's domestic expansion. However, competition from TSMC, Samsung (KRX: 005930), AMD (NASDAQ: AMD), and Nvidia (NASDAQ: NVDA) remains fierce, and Intel must consistently innovate and deliver.
Significance and Lasting Impact: Should Intel succeed in its foundry transformation, the lasting impact will be a more resilient and geographically diversified global semiconductor supply chain, reducing reliance on single regions. Its success would not only restore a leading American technology giant but also bolster national competitiveness in critical technologies like AI. Conversely, a failure would represent a significant setback for the "Made in America" chip strategy and further consolidate manufacturing power elsewhere, potentially exacerbating supply chain vulnerabilities.
What Investors Should Watch For in Coming Months:
- 18A and 14A Process Execution: Closely monitor Intel's progress in ramping up its 18A and future 14A process nodes. Timely production and achieving competitive yields will be crucial benchmarks for the success of its foundry strategy.
- Foundry Customer Traction: Securing major external customers for its advanced manufacturing nodes is paramount. Concrete announcements of significant design wins will validate the Intel Foundry Services model and indicate progress toward profitability.
- Financial Performance and Profitability: Watch for continued improvements in Intel's overall revenue and gross margins, particularly in its core client computing and data center segments. The ability to consistently return to GAAP profitability and narrow losses within the foundry division will be key indicators of the turnaround's effectiveness.
- AI Market Penetration: Monitor Intel's success with its Gaudi accelerators and its "AI PC" initiatives. Gaining meaningful market share in the rapidly expanding AI hardware sector against formidable rivals like Nvidia and AMD is essential for long-term growth.
- Competitive Landscape Dynamics: Keep an eye on AMD's and Nvidia's performance. While AMD's momentum has shown some signs of slowing, both companies continue to innovate. Intel's ability to differentiate and compete effectively will be crucial.
- Macroeconomic and Geopolitical Stability: The health of the global economy, particularly demand in the PC and data center markets, and ongoing geopolitical developments concerning semiconductor supply chains (e.g., U.S.-China trade relations), will continue to influence Intel's trajectory.
This content is intended for informational purposes only and is not financial advice.