Intel (INTC): What This Company Actually Does

How Intel makes money

Intel designs its own processor chips — CPUs for PCs and servers — and, unlike most chip designers today, still manufactures most of them itself, in its own factories ("fabs"), rather than outsourcing to a contract manufacturer like TSMC. It's now also trying to become a contract manufacturer in its own right (Intel Foundry), building chips for other companies. But almost all of Foundry's revenue today still comes from Intel's own product divisions, not outside customers — external Foundry customers accounted for just 2% of Foundry's FY2025 revenue.

Intel Foundry's external customer revenue was just $307M (2%) of its $17.8B total in FY2025 — still much closer to a captive internal factory than a true contract manufacturer, and one that has posted a loss for three straight years. Source: 10-K FY2025, p.7, p.21-23, p.72.

Where the revenue comes from

CCG and DCAI generate essentially all of Intel's profit; Foundry's large loss offsets much of it. Source: 10-K FY2025, p.21, 23, 24 (MD&A segment results).

Geographically (FY2025, by customer billing location): the U.S. is 29.8%, China 24.0%, Singapore 18.0%, Taiwan 14.5%, and other regions 13.6%. With 70% of revenue coming from outside the U.S. and heavy China/Taiwan concentration, Intel is directly exposed to U.S.-China semiconductor export controls and Taiwan-specific geopolitical risk.

Source: 10-K FY2025, Notes to Consolidated Financial Statements, p.74.

Customers and competitors

Intel sells largely B2B, to PC OEMs/ODMs and data-center/cloud operators; end consumers only encounter Intel chips inside finished devices. The top 3 customers accounted for 43% of FY2025 revenue (45% in FY2024, 40% in FY2023) — a concentration that has stayed persistently high and leaves results vulnerable to any one customer shifting suppliers.

• AMD — a direct competitor across both CCG and DCAI, using the same x86 architecture and steadily taking share from Intel in recent years.
• Nvidia — dominates the AI-accelerator (GPU) market, a space Intel has largely failed to break into (its Gaudi accelerator line has underperformed).
• TSMC — the world's #1 contract chip manufacturer, both the rival Intel must catch up to in advanced manufacturing and, at times, a contractor Intel itself pays to manufacture some of its own chips.

Source: 10-K FY2025, Risk Factors, p.50 (customer concentration); competitive discussion throughout Item 1.

The metric that matters most in this sector

Intel's entire turnaround thesis depends on whether Intel Foundry — the internal factory business — can climb out of a deep loss. Its operating margin is the single number that shows whether that transition is actually working.

Losses peaked in 2024 after roughly $3.3B in asset impairments, then narrowed in 2025 as restructuring and easing depreciation provided some relief. Still, Foundry consumed more than half its own revenue in losses in 2025 — a genuine break-even turnaround remains a long way off.

Source: 10-K FY2025, p.23 (Intel Foundry Financial Performance).

Leadership and ownership

CEO Lip-Bu Tan (66) took over in March 2025; predecessor Pat Gelsinger departed in December 2024 following conflict with the board. Tan previously led EDA software company Cadence from 2009 to 2021, served on Intel's own board from 2022 to 2024 before resigning, then returned about six months later as CEO — an unusual path back. Combined ownership across all 15 directors and officers is under 1% of shares outstanding.

The biggest ownership shift in 2025: the U.S. government became Intel's largest shareholder (8.4%), after the Commerce Department converted part of Intel's CHIPS Act subsidy into 275 million newly issued shares. Nvidia ($5B) and SoftBank ($2B) also became new equity investors in 2025. Vanguard (8.1%) and BlackRock (6.8%) round out the largest holders.

Source: DEF 14A 2026, p.27 (5%+ shareholders); 10-K FY2025, p.9 (government/strategic investor agreements), p.51 (executive bios).

Capital returns

Intel fully suspended its dividend in 2025, following a deep cut in 2024 — ending decades of consecutive dividend payments. The company is directing cash toward the Foundry buildout and shoring up its balance sheet instead.

Source: 10-K FY2025, p.53 (share repurchase activity), p.30 (financing cash flows).

How this company could fail

• Falling behind technologically — Intel has lost share in both client and data-center chips in recent years, and its push into AI accelerators (Gaudi) has largely failed, with $375M (2025) and $922M (2024) in related inventory write-downs. The company itself warns it could halt future advanced-node development if 14A doesn't land meaningful external customers.
• Extreme capital intensity and fixed costs — building and idling chip fabs are both enormously expensive; roughly $4.2B in impairments and accelerated depreciation hit in 2024-2025 alone, and Foundry has posted a double-digit-percentage operating loss for three straight years.
• Customer concentration plus U.S. government ownership risk — the top 3 customers make up 43% of revenue, and 70% of revenue comes from abroad (especially China and Taiwan). At the same time, the U.S. government's 8.4% stake could see its board votes shaped by political rather than commercial considerations — a risk the company discloses could block shareholder-value-maximizing deals like a sale or merger.

Source: 10-K FY2025, Risk Factors p.37-41, 50; MD&A p.23.

Five-year financials

Source: 10-K FY2021 through FY2025, each year's MD&A (income statement p.24-25, adjusted FCF p.29-30, total debt p.30).

What we still don't know

• Whether Intel 18A manufacturing yields have actually caught up to TSMC's isn't disclosed in these filings — the most recent (Q2 FY2026) earnings call would need to be checked.
• When the Intel 7 wafer supply shortage flagged in Q1 2026 will ease, and how much revenue it has cost isn't quantified in the filings reviewed here.
• Whether Intel has secured any meaningful external foundry customers for 14A since the FY2025 10-K (which states "none") would require checking more recent news or earnings calls.