Intel’s Fortunes: A New Chapter

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It has been nearly a year since Lip-Bu Tan assumed the mantle of leadership at Intel, a period marked by a confluence of events that would once have seemed improbable. The very nation, through its governmental agencies, has extended a hand, alongside the titans of Nvidia and Softbank, each seeking a share in the future of this venerable chipmaker. And Intel, after years of striving, has at last brought forth the 18A node, the culmination of a plan conceived by its predecessor, a testament to ambition, and perhaps, a touch of desperation to regain lost ground against the ascendant Taiwan Semiconductor Manufacturing.

The market, ever fickle, has responded with a vigor that suggests a deeper shift than mere quarterly earnings. An 84% ascent in the past year, followed by a 26% surge in January upon the unveiling of the Panther Lake chip for laptops – these are not the movements of a company merely recovering, but one awakening to a new potential. One observes, with a degree of cautious optimism, that the winds of fortune may indeed be changing for those who have long held faith in Intel’s inherent strengths.

Last week, Mr. Tan offered a glimpse into the year ahead at the Cisco AI forum. It was not a presentation of mere numbers and projections, but a subtle unveiling of a strategy, a vision taking shape. One sensed, beneath the carefully chosen words, a quiet confidence, a man accustomed to navigating the complex currents of global commerce, and perhaps, a man who understands the weight of expectation that rests upon his shoulders.

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The Rising Demand for Calculation

For some time, Intel has been shadowed by the brilliance of Nvidia in the realm of AI GPUs. Yet, it appears the very nature of artificial intelligence is evolving. The initial fervor for model training is giving way to a new phase – agentic inference – where AI agents are deployed to perform everyday tasks. This, surprisingly, demands not the specialized power of GPUs, but the robust, reliable compute of traditional CPUs. Mr. Tan, in his remarks, confirmed this shift, noting a desperate clamor from customers, a demand he admits he had not fully anticipated.

“Customers are crying for more products,” he confessed, “and I did not prepare the production enough to meet their requirements. People are starting to find out that, in application, the CPU is actually more useful in terms of performance, for all the compute requirement.”

It is a humbling admission, a reminder that even in the age of technological marvels, the simplest of principles – supply and demand – still hold sway. The first quarter may see a sequential dip in server CPU numbers, a temporary setback due to depleted inventories. But this, it seems, is merely a prelude to a surge, a consequence of a market awakening to the true potential of Intel’s core strengths. And, it is now reported, Intel intends to raise prices for its server CPUs in China by 10% – a bold move, perhaps, but one that suggests a newfound confidence in its pricing power.

The Data Center and AI segment generated $16.9 billion in the past year, a figure dwarfed by its peak of $26.1 billion in 2020. But consider this: 2020 predated the completion of Intel’s massive Fab 34 in Ireland, a facility poised to unleash a new wave of Granite Rapids server processors. And on the horizon looms Diamond Rapids, built on the advanced 18A node, promising even greater competitiveness. If agentic AI truly takes hold, it is not unreasonable to expect Intel’s DCAI segment to not merely surpass its 2020 high, but to ascend to heights previously unimagined.

A Shift in the Tides of Confidence

Early in the proceedings, Mr. Tan revealed that, emboldened by the success of Panther Lake, customers are now actively approaching Intel, seeking to explore the potential of its foundry for the upcoming 18AP and 14A nodes. His predecessor, Pat Gelsinger, had attempted to secure external clients for Intel’s foundry in 2024, but met with limited success. Perhaps these potential clients were hesitant, uncertain about the viability of the 18A node. Yields, it is said, were initially low, a source of concern for those seeking reliable production volumes.

But Mr. Tan, with a pragmatism born of years in the industry, has recruited external suppliers, bolstering Intel’s ability to improve 18A yields. And the results, he claims, are encouraging, with yields improving by 7% to 8% per month. With Panther Lake receiving favorable reviews and demonstrating the competitiveness of the 18A technology, prospective clients now appear more willing to entrust their production to Intel. One anticipates a commitment, a formal agreement, later this year.

A Vision for the Future

Some feared that Mr. Tan, upon assuming the helm, would prioritize cost-cutting and streamlining, potentially sacrificing investment in future technologies. It is a common refrain, this tension between short-term profitability and long-term innovation. But Mr. Tan, to his credit, has reassured observers that Intel remains committed to pushing the boundaries of what is possible. He has recently recruited a GPU architect, a skilled craftsman with a proven track record. And he is actively exploring the use of novel materials, seeking to enhance the performance of future chips. In particular, he is investigating glass substrates, considered superior insulators to their organic counterparts. And he is even contemplating the use of diamond, a material renowned for its conductivity.

In light of the surging demand for traditional CPUs, the growing interest in Intel’s foundry, and Mr. Tan’s unwavering commitment to research and development, one can reasonably conclude that the Cisco summit provided ample reason for Intel shareholders to remain optimistic. The year ahead promises not merely incremental progress, but a potential renaissance, a new chapter in the long and storied history of this venerable company. The future, as always, remains uncertain, but for those who have patiently weathered the storms, the horizon appears, at last, to be brightening.

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2026-02-09 16:42