Intel Targets Major Foundry Clients In New Strategy To Revitalize Chip Design, Says UBS - Apple (NASDAQ:AAPL), Broadcom (NASDAQ:AVGO)

Intel Corp. INTC is reportedly strategizing to rejuvenate its chip design and broaden its foundry business, with the potential of securing significant clients such as Nvidia Corp. NVDA and Broadcom Inc. AVGO.

What Happened: UBS analyst Timothy Arcuri believes Intel’s new CEO, Lip-Bu Tan, will prioritize the company’s design and foundry capabilities in the immediate plan. Arcuri further stated that Intel is on the verge of securing commitments from Nvidia or Broadcom to utilize its foundry services, while also progressing its 18A manufacturing process, reported Seeking Alpha.

Arcuri stated that Nvidia seems more likely than Broadcom to adopt Intel’s foundry technology, possibly for gaming applications, though power consumption remains a significant concern.

Intel is also said to be planning to compete more aggressively with Taiwan Semiconductor Manufacturing Co. TSM enhancing its packaging innovations. The company’s partnership with United Microelectronics Corp. UMC is progressing well, with production expected to start in late 2026. This could establish them as a secondary high-voltage FinFET supplier after TSMC and potentially lead to future collaborations with Apple AAPL.

Arcuri stated that further details on Intel’s foundry developments will be revealed at the upcoming Direct Connect event on April 29.

Why It Matters: The strategic shift comes in the wake of a leadership change at Intel. The company’s stock rallied following the announcement of its new CEO, with shares increasing by approximately 25%. In his first statement after being chosen as the new CEO, Tan pointed towards an overhaul plan including cost-cutting measures, a restructuring of management and a renewed focus on AI chip production.

He has openly criticized former CEO Pat Gelsinger's approach, especially in manufacturing and decision-making. One of Tan's main priorities is overhauling Intel Foundry, which supplies chips to companies like Microsoft and Amazon. He is also expected to revive AI initiatives beyond servers, focusing on software, robotics, and AI foundation models.

Meanwhile, the new Intel CEO is all set to deliver an opening keynote at Intel Vision 2025 on March 31 in Las Vegas wherein he is scheduled to address how the company aims to empower innovative solutions and accelerate business success in the AI era.

Intel stock climbed 5.35% over the past month. It closed 0.16% lower on Monday at $24.22.

Intel holds a momentum rating of 27.89% and a growth rating of 3.76%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance. For an in-depth report on more stocks and insights into growth opportunities, sign up for Benzinga Edge.