Intel Slides to 8th in WSB Rankings Amid Stock Slump and Strategic Shifts

Intel currently holds the 8th position in the latest WSB ranking, down three spots from the previous day.

Intel (INTC) shares have dropped consecutively for two days, losing a total of 11.84%. The downtrend continued with a 3.33% decline in the latest trading session.

Last month marked a significant milestone for Intel as the company announced progress in its Intel 18A process, a crucial step in its roadmap to regain semiconductor process leadership by 2025. Key products like Panther Lake (AI PC client processor) and Clearwater Forest (server processor) have come online and successfully booted their operating systems. Intel is betting heavily on the 18A process, seen as central to future business expansion in its foundry services. For instance, an agreement with Arm last year allows chip designers to utilize this process for low-power SoCs.

However, reports indicate that Broadcom received test wafers from the 18A process but found it currently unsuitable for mass production. Despite this, Broadcom has not fully abandoned the 18A process and is yet to finalize its evaluation. This development, while challenging for Intel, does underline the extended timeline and hurdles they face in realizing full-scale production.

Intel CEO Pat Gelsinger had previously asserted that the 18A process is superior to TSMC's N2 process. The 18A features RibbonFET gate-all-around transistors and PowerVia backside power delivery, technologies Gelsinger claims will make it more area-efficient, cost-effective, and higher-performing than competitors. Furthermore, he revealed that customers are confident in the 18A process, with one even prepaying a considerable amount to secure future capacity.

Intel aims to bring the 18A process to market in 2025, with full production readiness targeted by the end of this year. Panther Lake and Clearwater Forest are expected to enter mass production next year, giving Intel a limited window to refine its processes.

Facing declining performance and lagging in the AI race, Intel is devising a self-preservation strategy. This involves severing non-core businesses to optimize its financial structure. Notably, the plan excludes any moves to split up or sell off its chip foundry business.

In a surprising move, Intel recently announced it would no longer use its own Intel 20A process for the upcoming Arrow Lake processors, opting instead to outsource this task to TSMC. TSMC will produce all the chips for Arrow Lake, with Intel handling only the packaging. This pivot indicates a strategic shift focused on cost control and manufacturing efficiency.

Initially showcased at last year’s Innovation conference, Arrow Lake was meant to be manufactured using the 20A node. However, Intel decided to abandon this plan, reallocating resources to the more advanced 18A node. Financial pressures, highlighted by disappointing recent earnings and a workforce reduction of around 15,000 employees, influenced this decision. The move allows Intel to save on production capital expenditures and redirect funds towards the development of the 18A process, which is slated for 2025 mass production.

Technologically, the shift underscores Intel's limited enthusiasm for the 20A node. Despite its innovative RibbonFET and PowerVia technologies, it wasn't widely applied in mass production. Intel has recognized that focusing directly on the 18A node aligns better with its long-term strategy.

Sources indicate that Arrow Lake will utilize TSMC's N3B process (3nm). This collaboration not only offers production flexibility but also aids in cost management, enhancing product competitiveness. With TSMC's established reputation in the advanced process technology landscape, Intel benefits from stable, high-performance yields.

While the 20A node is sidelined, Intel's progress with 18A is promising. The defect density of the 18A has fallen below 0.40, meeting the mass production standard. Intel released the 18A process design kit (PDK 1.0) in July, receiving positive feedback from partners. Products built on 18A, such as the next-generation Core (Panther Lake) and Xeon (Clearwater Forest) processors, are set to launch in 2025.

In synchronizing its foundry strategy with external partners, Arrow Lake is expected to launch later this year, leveraging TSMC's advanced 3nm process, significantly boosting performance and efficiency over Intel 4 used in Meteor Lake. Desktop versions are anticipated in October, with mobile versions possibly debuting at CES 2025.

Intel's ongoing development with 18A underscores its importance for the years following 2025, aiming to close the manufacturing gap with competitors and reassert its dominance in the high-end chip market.