Intel Foundry Faces its Final Curtain on Samsung-Tesla Deal
A single customer win has exposed the core cracks in Intel’s foundry strategy and accelerated Samsung’s resurgence
Intel stock is up 0.3% after the news at the time of the writing illustrating the ignorance of institutional investors, analysts, and traders about the semiconductor industry.
TSMC stock is down 1.4%
Introduction: A Turning Point for Intel’s Foundry Dreams
The second quarter of 2025 will likely be remembered not for what Intel built—but for what it lost. On July 24, CEO Lip-Bu Tan addressed investors with candor rarely heard in the chip industry. His remarks confirmed the quiet collapse of Intel’s most ambitious plans: manufacturing projects in Germany and Poland were canceled, Ohio’s flagship fab expansion was slowed, and assembly operations were consolidated in Costa Rica. At the core of these decisions lies a reality that Intel can no longer escape—without external customers like Tesla, the economics of its foundry business simply do not work.
Tan’s acknowledgment that Intel 18A can be sustained with internal products, but Intel 14A cannot, is more than a roadmap update—it’s a strategic reckoning. And within 24 hours of Intel’s earnings call, Tesla CEO Elon Musk delivered the final blow. In a surprise announcement on X, Musk confirmed that Tesla’s next-generation “AI6” chip would be manufactured not by Intel, but by Samsung Electronics using its 2nm SF2 process. The statement not only made public Samsung’s 22.8 trillion won foundry win but also positioned Samsung ahead of TSMC—and far beyond Intel—in one of the most critical semiconductor engagements of the decade.
According to Table 1, the financials for Intel Foundry have been stagnant—and worse, deteriorating in their mix. Despite growing internal demand, the external customer segment remains virtually nonexistent. In 1Q25 and 2Q25, Intel posted negative external foundry revenue due to cancellations or write-backs, suggesting refund obligations or loss contracts. The implication is clear: Intel is building chips primarily for itself, and without third-party demand, the entire foundry model loses economic justification.