Since 2021, Intel has seen revenue decline by 33%, driven in part by Apple’s shift to in-house processors and intensifying competition from AMD. Over the last four quarters the company reported negative operating margins, with the most recent quarter showing a 0.5% net loss margin. Management attributes part of the shortfall to delayed ramp-up of its 10nm and 7nm production lines, which have slipped by six to nine months on key AI-optimized chips. Despite a combined $8.9 billion in U.S. government incentives aimed at subsidizing new factory construction in Ohio and Arizona, Intel’s cost per wafer remains above industry benchmarks, keeping profitability under significant strain.

In January, a major U.S. brokerage upgraded Intel from Hold to Buy and set a revised long-term target of $66.52, citing stronger-than-expected yields on its 18A process node. The firm noted Intel beat its conservative EPS guidance by $0.07 in Q4, even as revenue declined 4.1% year-on-year amid supply constraints. Key growth drivers identified include surging AI demand in data centers and nascent foundry partnerships with Nvidia and Microsoft. The upgrade report forecasts that improved yields on the 18A node could boost gross margins by up to 5 percentage points by late 2026, narrowing the gap with competitors.

To reclaim process leadership lost to TSMC over the past decade, Intel has committed to being the first chipmaker to adopt ASML’s extreme-ultraviolet high-NA lithography tools in 2026. These machines, capable of finer patterning, are expected to accelerate Intel’s roadmap for the 5nm and 3nm-equivalent nodes. Company executives project that high-NA deployment will improve die scaling by 20% and reduce defect rates by as much as 30%, potentially unlocking cost efficiencies in its Ohio fab expansions. While delivery schedules for the first high-NA units remain tentative, Intel’s capital expenditure plan of $25 billion for 2026 allocates roughly one-fifth of its total investment to these next-gen tools.