Intel's 18A Process Struggles Amid Job Cuts and Financial Losses
Intel is placing significant strategic importance on its “18A” manufacturing process, a next-generation technology for silicon chips that the company aims to leverage in catching up to industry leaders like TSMC. With 18A, Intel intends to resume manufacturing its own processor designs in-house, including the forthcoming Series 3 Core Ultra chips for laptops, internally codenamed Panther Lake. This marks a shift from previous Core Ultra chips, which relied partly on TSMC for manufacturing. Furthermore, Intel plans to offer 18A manufacturing capacity to external chipmakers, a key component of former CEO Pat Gelsinger’s vision to establish Intel as a competitive, cutting-edge, and primarily U.S.-based chip foundry for the broader industry.
However, a recent Reuters report suggests that Intel is encountering difficulties in producing usable chips with the 18A process. According to individuals briefed on the company’s test data since late 2024, only about 10 percent of the chips manufactured on 18A have met Intel’s specifications as of summer 2025. Intel has disputed these figures, with CFO David Zinsner telling Reuters that “Yields are better than that,” though the company did not provide an alternative percentage.
These reported challenges resonate with Intel’s history of manufacturing delays over the past decade. The company faced similar issues with its 14-nanometer process, which experienced initial delays in 2013 and 2014. While Intel eventually transitioned its product lineup to 14nm by late 2015, it remained reliant on that process for several years, affecting laptop chips until 2019-2020 and desktop chips until 2021-2022. Throughout these periods, Intel’s public relations strategy often involved reassuring stakeholders that internal progress was strong, issues were being resolved, and roadmaps remained on track, while occasionally adjusting product launch timelines.
Despite the recent report, Intel reaffirmed on July 30, 2025, that its Panther Lake chips are “fully on track” and will launch using the 18A manufacturing process in the second half of 2025, with more models expected in 2026. These planned product launches will serve as critical indicators of whether Intel’s 18A challenges are standard development hurdles or more significant obstacles that could further delay its strategic objectives.
The reported struggles with 18A come amid a challenging financial period for Intel. The company reported a $2.9 billion loss in the second quarter of 2025, following a $1.6 billion loss in the same quarter of the previous year. In total, Intel incurred an $18.8 billion loss in 2024. A substantial portion of these losses is attributed to the extensive restructuring efforts initiated by new CEO Lip-Bu Tan, characterized by significant cost-cutting measures.
These measures include substantial job reductions, such as 2,400 positions cut in Oregon in July 2025, part of a broader plan that could see up to 24,000 jobs eliminated company-wide. Construction on a planned manufacturing facility in Ohio has been slowed, while proposed manufacturing and testing facilities in Germany and Poland have been canceled. Intel has also closed its automotive division and spun off its RealSense robotics and biometrics division into a separate entity. Furthermore, while Intel has not made formal announcements regarding its Arc dedicated GPU lineup, it has not launched any new products in this segment since January 2025, contrasting with multiple next-generation product rollouts from competitors like Nvidia and AMD.
Under CEO Tan’s leadership, all major chip designs now require his personal review and sign-off before manufacturing can commence. This policy has already led to the reintroduction of Hyper-threading technology in next-generation server products. Tan states that this approach is intended to “improve our execution and reduce development costs.”
While the plan to offer both 18A and the upcoming 14A process to external customers remains in place, Tan has indicated that Intel’s investment in 14A will be contingent upon “confirmed customer commitments.” This suggests that if Intel struggles to secure sufficient external customers—a challenge potentially exacerbated by recent reliability concerns—it could opt to cancel 14A and other future manufacturing processes entirely. In a note to all Intel employees on July 24, 2025, Tan emphasized this shift in strategy, writing, “There are no more blank checks. Every investment must make economic sense.”