Intel gave the first strong signals of its long-awaited financial recovery with its third quarter results. According to the company’s statement, revenue reached $13.7 billion, which means an increase of $800 million compared to the same period last year. The rise in net income is more striking: a profit of $4.1 billion shows that the company has regained financial balance. Although this picture indicates a strong recovery, there are still critical areas that remain unclear behind the scenes.
This improvement in revenues is not limited to operational efficiency alone; High amounts of investments from different sources also support this picture. Following SoftBank’s $2 billion investment, the US government became a 10 percent partner in Intel, and in this context, $5.7 billion was transferred to the company. Nvidia, on the other hand, purchased shares worth $5 billion in September. Taken together, these three investments contributed approximately $13 billion to Intel’s balance sheet. In addition to all this, the $20 billion cash flow provided by the sale of Altera and Mobileye shares also stands out as a noteworthy element.
Intel hasn’t clarified its foundry strategy
Despite this financial revival, uncertainty over the foundry business overshadows the company’s growth plans in the coming years. This unit, where Intel produces customer-specific chips, has long been one of the company’s most painful areas. CEO Lip-Bu Tan made sweeping layoffs at the division in the summer, but this operational contraction did not clarify the long-term strategy. The company has still not put forward a road map based on solid foundations in this field. Investors began to question this situation more and more.
One of the conditions the US government imposed on the investment was that Intel not withdraw from the foundry business for the next five years. This requirement clearly shows that the foundry unit has not only commercial but also strategic and political importance. Intel plays an important role in this period when the USA wants to strengthen its own semiconductor infrastructure. However, the question remains unanswered as to how the company will continue on the foundry side. Neither the statements from the management nor the current investments can fully fill this gap.
In his statements, Tan defines the foundry unit as an area that “should be built on a long-term relationship of trust.” On the other hand, such statements do not mean clarity for investors. Although Tan stated that active contacts with potential customers are continuing, it has not yet been announced at what stage these contacts are or what results they produce. The company can only improve its production capability in this field with customer-oriented flexibility and high quality. It’s clear that the process requires both time and strategy.
Wall Street circles began to criticize Intel for not providing sufficient information about its foundry business. Because the future of this business line will play a critical role in the company’s overall recovery process. At this point, it is stated that progress should be made not only with new investments but also with a clear and applicable strategy. According to many analysts, the real issue facing Intel is not a lack of resources, but a lack of direction. Therefore, the foundry side should be reconstructed not only in terms of production but also in terms of governance.
In addition to all these, the cash inflow provided by Intel with the Altera and Mobileye shares it recently disposed of has expanded its short-term financial maneuvering area. The company is thus in a position to make flexible investments in different business lines, including the foundry. But investment flexibility alone does not mean success; because directionless growth brings with it the risk of inefficiency. Intel’s biggest task will be to turn this financial relief into strategic decisions. For the foundry space, this is more critical than ever.
The $5 billion investment with Nvidia also means closer technical cooperation with Intel. This partnership could directly impact chip development processes in the coming years. However, it is currently unclear how this cooperation will contribute to the foundry field in the short term. In addition to strategic partnerships, making the internal structure and production processes efficient is also important.