What To Expect From Intel In 2026: Foundry Business
Intel (NASDAQ:INTC) shares surged more than 80% in 2025. The rally bought Intel time and renewed credibility, not proof. As 2026 begins, investor attention will narrow decisively to the foundry business.
Since 2021, Intel has committed over $100 billion to global manufacturing expansion, anchored by massive new fabs in Arizona and Ohio. This scale is unmatched outside of TSMC and Samsung. Yet the economics remain unresolved. Intel’s Foundry segment posted an operating loss of roughly $7 billion in 2023, followed by additional multi-billion-dollar losses through 2024 and 2025, while external customer revenue continues to lag far behind internal demand. That gap defines the real test of 2026. The question is no longer whether Intel can build advanced fabs or deploy leading-edge process technology. It is whether the company can translate scale and technical progress into a commercially viable foundry model. So what are some of the key trends that investors much watch for in the foundry space?
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Scaling Up 18A Process With Good Yields
Intel 18A refers to an 18-angstrom, or roughly 1.8-nanometer, manufacturing process and is Intel’s most advanced node to date and the linchpin of its foundry turnaround. It is Intel’s first process node to combine RibbonFET gate-all-around transistors with PowerVia backside power delivery, a structural upgrade intended to close long-standing power and density gaps. 2026 will be defined by whether 18A can move from technical viability to economic competitiveness. While Intel began high-volume manufacturing in late 2025, the node’s success ultimately hinges on how quickly it can improve yields. So what do yields matter? They directly determine cost per wafer and gross margins, deciding whether 18A can be produced profitably at scale rather than remain a technically impressive but economically unviable node.
Customer Wins Will Be Key
At the end of the day, the viability of the foundry business will be determined via customers committing real silicon volume, not through roadmap announcements. For Intel, 2026 marks a shift from internal validation toward early-stage third-party engagement, but most customer relationships appear to remain exploratory rather than binding. The company reported $15 billion+ foundry backlog, reflecting interest across custom AI silicon, advanced packaging, and secure manufacturing. Intel’s external customer discussions in 2026 span a mix of hyperscalers, fabless designers, and government programs, but most remain at an early stage.
Microsoft has publicly confirmed collaboration on custom AI silicon, though specific process nodes have not been disclosed. AWS is working with Intel on custom AI fabric initiatives, but there is no confirmation that its Trainium 3 will be manufactured on 18A. Nvidia’s engagement is limited to exploratory discussions about advanced packaging, and 18A testing appears to be paused. Nvidia Isn’t Committing To 18A. What It Means For Intel Stock MediaTek has expressed interest in Intel Foundry as a future option, though node selection remains undecided. Separately, U.S. government contracts support Intel’s role in secure, domestic advanced-node manufacturing. Intel is being evaluated as a second-source or geopolitical hedge, not yet as a primary alternative to TSMC for leading-edge volume.
Intel’s 18A node will determine near-term credibility, but 14A will determine whether the company can realistically return to process leadership. Unlike 18A, 14A is not expected to drive revenue in the near term. Its importance lies in strategic positioning beyond the current decade. Now 2026 is the decision year for whether Intel moves forward with large-scale 14A investment. Management has been explicit that 14A capacity will only be built with firm external customer commitments in hand, reflecting tighter capital discipline and a reluctance to repeat past overexpansion. Without those commitments, Intel is unwilling to carry the financial and execution risk alone. If Intel does not secure an anchor customer by late 2026, the likely outcome is a slower path forward: extending and refining 18A-P through the late 2020s rather than pushing aggressively into 1.4nm. In that scenario, Intel would prioritize yield, cost, and customer diversification over headline node leadership.
The U.S. government is no longer just a regulator for Intel but a major stakeholder. Under the Trump Administration’s finalized CHIPS Act terms, the U.S. government holds a roughly 10% passive stake in Intel, effectively giving the company “national champion” status. This backing provides a structural floor for the stock, supports Intel’s capital-intensive foundry investments, and ensures the company remains the primary recipient of domestic defense and classified workloads. At the same time, persistent U.S.–China trade tensions have elevated Intel’s strategic role as the only viable advanced-logic “escape valve” for companies fully dependent on Taiwan-based manufacturing. By late 2026, Intel expects to control roughly 20% of the world’s most advanced logic capacity, positioning it as the only plausible advanced-node alternative on U.S. soil. To be sure, this does not guarantee immediate market share gains, but it does represent a significant strategic option value if geopolitical risk translates into supply-chain constraints.
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