Intel Has a Lot to Prove in 2025

2025 will be a pivotal year for chip-giant Intel (INTC 1.16%) as it navigates an industry that it no longer dominates. A multiyear turnaround effort led by former CEO Pat Gelsinger, which aimed to turn Intel into a world-class foundry, has yet to pay off as the company struggles on multiple fronts.

In the PC market, a combination of sluggish demand, stiff competition from AMD, and Qualcomm launching its Arm-based laptop CPUs have left Intel fighting for market share. In the data center market, years of lackluster products, AMD’s incredible comeback, and a shift in spending toward artificial intelligence (AI) chips have left Intel reeling. And in manufacturing, foundry customer wins have been few and far between as Intel drives toward completing its initial process technology roadmap.

Intel enters 2025 without a permanent CEO and with a strategy that’s somewhat up in the air. This year will be crucial for the company.

Intel 18A needs to work

The final process node on Intel’s initial foundry roadmap is Intel 18A. The company expects this process to be the best in the industry when it launches, and it’s packed with features, including a new transistor design and backside power delivery. The company has filled out its post-18A roadmap, but the whole foundry strategy hinges on the success of Intel 18A.

Intel 18A is expected to be ready for production in early 2025, although it will take time for volumes to ramp up. The company has snagged a few big-name customers for Intel 18A, including Microsoft and Amazon, but it’s unclear when those deals will begin to produce meaningful external foundry revenue. At the moment, essentially all of Intel’s foundry revenue is internal, coming from the company’s various product segments.

Intel plans to reach $15 billion in annual external foundry revenue by 2030. That ambitious target requires Intel 18A to deliver on its promises and launch on time. Any delays or missteps could be catastrophic for the company, not only because they would derail the foundry business, but also because Intel’s next-generation products depend on Intel 18A.

Leaping ahead in PC and server CPUs

Notwithstanding some fumbles with its latest Arrow Lake PC CPUs, Intel is in a reasonably strong competitive position in the PC CPU industry. The company has also gained ground in the server CPU industry with its Sierra Forest and Granite Rapids CPU families, although customers remain focused on AI chips, an area where Intel has fallen short.

In 2025, Intel has big launches scheduled in both markets. In the PC market, Intel plans to launch Panther Lake in the second half of the year. Panther Lake will bring manufacturing mostly back in-house after both Lunar Lake and Arrow Lake outsourced production to TSMC. The most performance-critical portions of Panther Lake will use the Intel 18A process.

In the server market, Intel should have Clearwater Forest ready to go next year. Like Sierra Forest, Clearwater Forest is an efficiency-focused processor comprised of large numbers of energy-sipping CPU cores.

The chips will be well suited for cloud-based workloads and other applications where core density is more important than raw performance. Like Panther Lake, Clearwater Forest will be built on the Intel 18A process.

If Intel 18A is delayed or runs into issues, Intel’s product roadmap will be in trouble.

Finding a new CEO

The surprise “retirement” of former CEO Pat Gelsinger has left Intel with temporary co-CEOs and a lack of clarity around its strategy. The company needs a new leader sooner rather than later, and an outsider might be necessary to sufficiently shake things up.

Changing the culture of a once-dominant industry leader that’s stuck in its ways is a monumentally difficult task. Whoever ends up in the top position is going to face some serious challenges as they try to recapture some of Intel’s former glory.

A turnaround stock for 2025

Intel stock has understandably cratered in response to all the uncertainty and upheaval plaguing the company. However, the company’s position as the only U.S.-based advanced logic semiconductor manufacturer puts it in a unique position. The stock currently trades well below book value, an indication that the market is extremely pessimistic.

While Intel is undoubtedly struggling, the company has a solid product roadmap and a foundry business that still has long-term potential. With the right leader and the right strategy, Intel stock could end up being a big winner over the next decade.