Intel Foundry gains new defense clients for 18A process

Intel Foundry, the chipmaker's manufacturing subsidiary, has added two companies to its roster of customers using its advanced fabrication process to produce semiconductors for the defense industry. The additional customers signify that companies are gaining confidence in Intel's 18A manufacturing process.

On Friday, Intel Foundry reported that Trusted Semiconductor Solutions and Reliable MicroSystems agreed to have the vendor manufacture their chips under the federal Rapid Assured Microelectronics Prototypes - Commercial project. RAMP-C is a Defense Department initiative started in 2021 to rebuild a U.S. commercial foundry network for manufacturing custom integrated circuits and commercial products for defense systems.

Trusted Semiconductor Solutions and Reliable Microsystems have agreed to use the 18A process and advanced packaging. Trusted Semiconductor Solutions designs radiation-hardened microelectronics for the military, defense and space industries. Reliable MicroSystems designs electronics used to model and mitigate radiation effects.

Last year, Intel demonstrated working chips built by the foundry, including the AI PC processor Panther Lake and the Xeon server processor Clearwater Forest. The next critical test of the 18A process will occur when Intel starts manufacturing the chips at scale this year.

"If you're producing chips that work, at least you know the process works," said Jack Gold, principal analyst at J.Gold Associates. "How good the process is, is a different issue. We won't know that until they get into production, and we see what comes out."

Nevertheless, the latest Intel Foundry contracts were endorsements of 18A by the two defense contractors, Gold said.

Companies collaborating with Intel on the RAMP-C project include tech companies Nvidia, IBM and Microsoft and defense contractors Boeing and Northrop Grumman. Other companies in the project include chipmaker Qualcomm Technologies and semiconductor manufacturer GlobalFoundries.

Last April, the Defense Department approved Intel Foundry's 18A process for manufacturing prototypes of semiconductors designed for defense systems.

Government efforts to revive U.S. chip manufacturing took a significant step forward in 2022, when Congress passed the CHIPS and Science Act. This act authorized spending $52.7 billion on semiconductor manufacturing, research and workforce development during the next five to 10 years. A report by the Semiconductor Industry Association (SIA), Boston Consulting Group and Oxford Economics projected that the act will triple U.S. chip manufacturing capacity by 2032.

The U.S. Department of Commerce awarded Intel $7.86 billion under the CHIPS Act, the largest award under the legislation. Other recipients included Taiwan Semiconductor Manufacturing Co. (TSMC), Micron Technology and Samsung Electronics.

The United States was once the global leader in semiconductor manufacturing, accounting for 37% of fabrication in 1990, according to SIA. By 2020, that percentage had fallen to 12%.

Once the largest chipmaker in the world, Intel led the decline in U.S. semiconductor manufacturing. In the third quarter of 2024, TSMC accounted for 64% of the world foundry market, according to research firm Counterpoint.

Whether Intel can hold on to its foundry business remains an open question. The money Intel received from the CHIPS Act isn't enough to make the foundry a significant competitor to TSMC, and it's unclear whether Intel can raise the necessary funds, analysts said.

Intel interim co-CEO David Zinsner discussed the possibility of selling the foundry during a December interview with a Barclays analyst at the bank's Global Technology Conference in San Francisco. "That's an open question, you know, for another day," he said.

CFO Zinsner and 30-year veteran Michelle Johnston Holthaus were appointed interim co-CEOs after the Intel board forced CEO Pat Gelsinger to retire Dec. 1. Holthaus oversees all Intel products.

Antone Gonsalves is an editor at large for Informa TechTarget, reporting on industry trends critical to enterprise tech buyers. He has worked in tech journalism for 25 years and is based in San Francisco. Have a news tip? Please drop him an email.