Intel has limited customer commitments for latest chip manufacturing tech, CFO says

(Reuters) -The volume of processors Intel (NASDAQ:INTC) is set to produce for external customers using its upcoming manufacturing technology is currently "not significant", finance chief David Zinsner said on Tuesday.

Committed volumes, or the amount of external customers’ chips set to be produced by Intel using upcoming manufacturing tech, is presently not significant, Zinsner said at J.P. Morgan’s Global Technology, Media and Communications conference being held in Boston, Massachusetts.

Santa Clara, California-based Intel is striving to become a contract manufacturer of chips, but has struggled to progress with its 18A and latest 14A chip manufacturing technologies.

However, last month the company said several customers planned to build test chips for the forthcoming process.

"We get test chips, and then some customers fall out of the test chips... So committed volume is not significant right now, for sure," Zinsner said.

AI chip front-runner Nvidia (NASDAQ:NVDA) and custom chipmaker Broadcom (NASDAQ:AVGO) are running manufacturing tests with Intel, Reuters reported in March.

The contract manufacturing unit, called foundry, is on track to break-even sometime in 2027 and would require external customers to generate low to mid-single digit billions in revenue to achieve that, Zinsner added.

The foundry unit reported $4.7 billion in sales in the March quarter, up 7% from the year-ago period. However, chips manufactured for the company’s own products unit make up a large chunk of these sales.

New CEO Lip-Bu Tan, who is tasked with undoing years of missteps at the chipmaker, has retained Intel’s practice of manufacturing its own chips and attempting to produce processors for others.

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"It’s a fair assessment that Lip-Bu isn’t thinking about massive changes," Zinsner said during the call.

So far, Tan has flattened the organization and centered his strategy around streamlining by divesting non-core assets like some of its Altera stake.

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