Intel Stock Drops 9% Amid Foundry Business Challenges, CEO Warns of No More Blank Checks

Intel's stock dropped 9% after the chipmaker announced it would slash foundry costs and axe chip facility projects in Germany and Poland. CEO Lip-Bu Tan stated that the company will only build out its next chip manufacturing process, 14A, based on confirmed customer commitments. Intel's foundry business is struggling to secure customers, and the company may pause or discontinue it entirely if it fails to secure a significant external customer.

Intel's stock dropped 9% after the chipmaker announced it would slash foundry costs and axe chip facility projects in Germany and Poland. CEO Lip-Bu Tan stated that the company will only build out its next chip manufacturing process, 14A, based on confirmed customer commitments. Intel's foundry business is struggling to secure customers, and the company may pause or discontinue it entirely if it fails to secure a significant external customer [1].

The decision comes after Intel reported an $18.8 billion loss in 2024, its first annual loss since 1986. The company continues to face competition from Nvidia, AMD, Samsung, and TSMC. The cancellation of Intel's megafab in Magdeburg, Germany, and a packaging plant in Poland, along with the consolidation of assembly and test operations in Costa Rica to larger sites in Vietnam and Malaysia, is part of the company's effort to become more financially disciplined [2].

Intel's new CEO, Lip-Bu Tan, has emphasized the importance of securing external customers to justify the development of its next-generation manufacturing process, 14A. Without a significant customer, the company may have to cancel or pause development of 14A and subsequent technologies. However, Intel plans to continue manufacturing chips with its 18A technology and a variant through 2030 [3].

The stock market's reaction to these announcements reflects investor concerns about Intel's ability to secure external customers and the potential impact on its foundry business. Intel's stock price has been volatile in recent months, with a 26% drop in August 2024 following the announcement of 15,000 job cuts and a pause in its dividend to save $10 billion by 2025 [1].

Intel's struggles in the foundry business and its manufacturing footprint in Europe highlight the challenges the company faces in the competitive semiconductor industry. The company's new CEO is determined to cut costs and turn its fortunes around, but the path forward remains uncertain. Investors will be closely watching Intel's progress in securing external customers and the impact of its cost-cutting measures on the company's financial performance.

References:
[1] https://profit.pakistantoday.com.pk/2025/07/25/intel-wins-investor-lawsuit-over-alleged-stock-price-inflation/
[2] https://www.pcgamer.com/hardware/processors/intels-german-megafab-dream-is-over-ceo-lip-bu-tan-kills-the-project-beset-with-setbacks-from-eu-funding-to-ancient-neolithic-remains-to-save-cash/
[3] https://www.reuters.com/world/asia-pacific/intels-foundry-future-depends-securing-customer-next-gen-chipmaking-tech-2025-07-25/