- Intel CEO Lip-Bu Tan considers shifting foundry unit’s focus to “14A” chipmaking process
- Potential write-off for “18A” process could cost hundreds of millions of dollars
- Intel board is expected to weigh options in July meeting
SAN FRANCISCO, July 1 (Reuters) – Intel’s (INTC.O), opens new tab new chief executive is exploring a big change to its contract manufacturing business to win major customers, two people familiar with the matter told Reuters, in a potentially expensive shift from his predecessor’s plans.
If implemented, the new strategy for what Intel calls its “foundry” business would entail no longer marketing certain chipmaking technology, which the company had long developed, to external customers, the people said.
Since taking in March, CEO Lip-Bu Tan has moved fast to cut costs and find a new path to revive the ailing U.S. chipmaker. By June, he started voicing that a manufacturing process that prior CEO Pat Gelsinger bet heavily on, known as 18A, was losing its appeal to new customers, said the sources, who spoke on condition of anonymity.
To put aside external sales of 18A and its variant 18A-P, manufacturing processes that have cost Intel billions of dollars to develop, the company would have to take a write-off, one of the people familiar with the matter said. Industry analysts contacted by Reuters said such a charge could amount to a loss of hundreds of millions, if not billions, of dollars.