Investing.com -- Intel (NASDAQ: INTC )’s upcoming chip manufacturing technology is set to produce a volume of processors for external customers that is currently not significant, according to the company’s finance chief David Zinsner. The statement was made on Tuesday at the Global Technology, Media and Communications conference held by J.P. Morgan in Boston, Massachusetts.
Intel, based in Santa Clara, California, has been working on becoming a contract manufacturer of chips. However, the company has faced difficulties advancing its latest 18A and 14A chip manufacturing technologies. Despite the challenges, Intel reported last month that several customers planned to build test chips using the forthcoming process.
Zinsner explained the process, stating that they receive test chips, but some customers discontinue after the test chips, leading to the committed volume not being significant at present.
Nvidia (NASDAQ: NVDA ), a leader in AI chips, and custom chipmaker Broadcom (NASDAQ: AVGO ) are currently conducting manufacturing tests with Intel, a fact reported in March.
Intel’s contract manufacturing unit, known as the foundry, is projected to reach a break-even point in 2027. To achieve this, the foundry would need to generate low to mid-single digit billions in revenue from external customers, Zinsner added. In the March quarter, the foundry unit reported sales of $4.7 billion, marking a 7% increase from the same period last year. However, a large portion of these sales come from chips manufactured for Intel’s own products unit.
The company’s new CEO, Lip-Bu Tan, who is tasked with correcting past missteps at the chipmaker, has continued Intel’s practice of manufacturing its own chips while also attempting to produce processors for others. Zinsner noted on the call that it’s a fair assessment that Tan isn’t planning any massive changes.
Tan has so far restructured the organization and focused his strategy on streamlining by divesting non-core assets like some of its stake in Altera.
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