March 4 (Reuters) – Intel Chief Executive Lip-Bu Tan is beginning to recognize its 18A manufacturing technology as a potential product for external customers after keeping it mostly for internal use last year, Chief Financial Officer David Zinsner told a technology conference in San Francisco on Wednesday.
That could mark a reversal of a major aspect of the turnaround strategy Tan laid out last year, when he said he believed Intel’s so-called 18A manufacturing process, in which his predecessor Pat Gelsinger invested heavily, could generate reasonable returns only if used in Intel’s own products.
The company’s shares rose about 6% amid broad gains in chip stocks.
“While Lip-Bu thought we should probably focus on 14A as a foundry node and have 18A really just be an internal node, now that we’ve seen some real progress, I think he’s now starting to realize that this is actually a good node to offer to external customers as well,” Zinsner said Wednesday at the Morgan Stanley Technology, Media & Telecommunications Conference.
According to Reuters, only a small portion of the chips printed via 18A are enough to be made available to customers. Intel said its output, or the number of high-quality chips per silicon wafer, is improving every month. Weak yields also typically put pressure on margins.
Tan has made significant changes at Intel since being named CEO. Last year, Intel cut about 20% of its workforce as Tan reworked the company’s strategy for dealing with artificial intelligence.
Tan also vowed to continue operating Intel factories and find new customers for its next-generation manufacturing technology called 14A.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Alan Barona)