Intel Corporation (INTC) saw its shares plunge 8.5% in premarket trading on Wednesday, falling to $117.05, despite announcing a key manufacturing milestone for its advanced 18A-P chip process. The decline came as a broader selloff in semiconductor stocks and lingering concerns over yields, customer adoption, and weak sector trading overshadowed the company's progress.
The iShares Semiconductor ETF (SOXX) dropped 5.9% in premarket trading, reflecting widespread pressure across the chip industry. Rival Advanced Micro Devices (AMD) fell 7.3%, Nvidia (NVDA) slipped 2.4%, and Taiwan Semiconductor Manufacturing Company (TSM) declined 3.5%, highlighting the sector-wide downturn.
18A-P Milestone Details
Intel announced late Tuesday that its 18A-P manufacturing process had entered "risk production," an early stage of limited manufacturing used to check defects, performance, and consistency before moving to high-volume output. The company stated that 18A-P delivers 9% higher performance at the same power, or 18% lower power at the same speed, compared to its existing 18A process. Additionally, the process is design-rule compatible with 18A, allowing customers to reuse much of the technical layout work already completed.
"Our updates and presentations at VLSI signal to Intel Foundry customers and partners that we are fully committed," said Naga Chandrasekaran, executive vice president and general manager of Intel Foundry, in a company statement. He added, "We have more work ahead."
Analyst Reactions
Analysts described the milestone as a positive but not definitive step. Dan Hutcheson, vice chair of TechInsights, told MarketWatch that moving to risk production means Intel is "ready to take on external customers" and called 18A-P a "critical milestone in Intel's recovery." Creative Strategies CEO Ben Bajarin described it as "a big step up," while cautioning that Intel Foundry "has consistently been a loss leader."
The broader market backdrop remains challenging. On Tuesday, the Nasdaq Composite fell 1.15%, the S&P 500 lost 0.57%, and the Philadelphia Semiconductor Index dropped 5.7% as investors sold richly valued technology stocks after a sharp run. The selloff extended to peers, with AMD, Nvidia, and TSMC all declining, underscoring the headwinds facing the chip sector.
Intel's Foundry Ambitions and Demand Outlook
The stock's performance reflects a shift in investor focus from Intel's legacy PC-chip business to the success of Intel Foundry, its contract-manufacturing unit for external chip designers. The company aims to establish itself as a credible rival to TSMC in advanced production, but key challenges remain. Yield—the proportion of working chips from each wafer—will be critical to determining whether 18A-P is profitable enough to attract outside customers. Risk production can still expose cost or reliability issues that could delay high-volume output.
On the demand side, Intel has a positive story. Reuters reported that demand for Intel central processors from AI-service firms was strong enough in the first quarter that the company sold some chips it had previously written off. Intel forecast second-quarter revenue of $13.8 billion to $14.8 billion, above the $13.07 billion estimate compiled by LSEG. However, if customers wait for later nodes or if the chip selloff deepens, the stock could remain under pressure despite technological progress.
As of 4:04 a.m. EDT, Intel was quoted at $117.05, down $10.85 from Tuesday's close. The company's ability to navigate the current market turbulence while advancing its foundry plans will be closely watched by investors.
