Intel’s Bold Reset: Can Lip-Bu Tan Win Over Nvidia and Broadcom?

Intel's Bold Reset: Can Lip-Bu Tan Win Over Nvidia and Broadcom?

March 24, 2025 - Intel Corporation (NASDAQ: INTC) is betting big on a strategic overhaul. Under new CEO Lip-Bu Tan, the chipmaker is targeting Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) to revive its foundry business and reclaim its edge. With financial losses piling up and TSMC dominating the landscape, Intel's latest roadmap-highlighted in a GuruFocus report citing UBS insights-faces a make-or-break moment.

A Fresh Start After Gelsinger

Intel's board forced out CEO Pat Gelsinger in December 2024, ending a three-year run marked by ambitious promises and steep setbacks. Gelsinger's IDM 2.0 strategy aimed to restore Intel's manufacturing prowess through Intel Foundry Services (IFS), but it racked up $13.4 billion in losses and delayed key projects, like an AI chip now shelved until 2027. Lip-Bu Tan, a former Cadence Design Systems CEO, stepped in with a new vision: sharpen Intel's chip design roots while pushing IFS to attract top-tier clients.

Targeting the Titans

Intel's pitch centers on Nvidia and Broadcom, semiconductor heavyweights testing its 18A process-a 1.8nm node built for advanced chips. UBS notes Nvidia is "closer" to signing on, possibly for gaming GPUs, while Broadcom's interest hinges on results. Power efficiency is the catch: both companies demand it, and Intel's new 18AP variant aims to deliver. Testing began in Q1 2025, building on evaluations Nvidia's Jensen Huang confirmed as early as 2023. Success here could redefine Intel's foundry fortunes.

Foundry Ambitions, Real Challenges

IFS is Intel's lifeline to compete with TSMC, which commands over 60% of the foundry market. Backed by U.S. CHIPS Act funding, Intel wants to be a domestic alternative, but the numbers tell a tough story: a $1.6 billion loss in 2024, 15,000 job cuts, and GuruFocus's "6 Warning Signs" pointing to financial strain. Past stumbles-like Broadcom's underwhelming 2024 tests-add skepticism. Landing Nvidia or Broadcom would bring revenue and credibility, but power efficiency remains the hurdle TSMC has already cleared.

TSMC's Shadow

TSMC isn't idle. On March 12, 2025, Reuters reported it proposed a joint venture with Nvidia, AMD, and Broadcom to run Intel's U.S. factories-a potential knockout blow to IFS. Coupled with TSMC's $100 billion U.S. fab pledge, announced by President Trump on March 3, this ramps up the pressure. Intel's U.S.-centric mission aligns with policy goals, but TSMC's execution threatens to eclipse it.

A Defining Moment

Intel's reset under Tan is a high-stakes gamble. The 18A/18AP process offers technical promise, and Nvidia's tentative interest sparks hope. Yet, financial woes, past missteps, and TSMC's dominance loom large. As of March 24, 2025, the outcome hangs in the balance. If 18AP proves efficient and a big client commits, Intel could stage a comeback. If not, Tan's roadmap risks becoming another chapter in a storied company's struggle to adapt. The industry is watching-and Intel's next moves will decide its fate.