Core Viewpoint - Intel is making significant investments in ASML's high-NA extreme ultraviolet (EUV) lithography systems to regain its competitive edge over TSMC in chip manufacturing, following a period of decline in market share and stock performance [1][2][4]. Group 1: Company Strategy and Leadership - Intel has experienced a 13% decline in stock over the past five years, while the S&P 500 has risen by 83% [1]. - The company has undergone strategic shifts under four different CEOs in the last eight years, primarily due to competitive pressures from TSMC and AMD [2]. - The current CEO, Lip Bu-Tan, has committed to manufacturing its own chips and reclaiming the process lead from TSMC, focusing on ASML's latest lithography systems [3]. Group 2: Competitive Landscape - Intel has lost significant market share in the PC segment to AMD, with AMD's share increasing from 13% to 33.6% between Q3 2018 and Q3 2025, while Intel's share dropped from 87% to 66.4% [10]. - TSMC has outpaced Intel in adopting ASML's EUV systems, which has allowed it to produce smaller and more efficient chips [8][9]. - Intel's strategy of relying on older deep ultraviolet (DUV) systems led to production delays and chip shortages, further exacerbating its competitive disadvantage [8]. Group 3: Technological Advancements - Both Intel and TSMC currently utilize ASML's low-NA EUV systems, which cost approximately $220 million each, for producing advanced chips [11]. - To produce even smaller chips, both companies will need to invest in high-NA EUV systems, which can cost up to $400 million each [12]. - Intel has already deployed two high-NA EUV systems for R&D and plans to mass-produce its 14A chips by 2027 and 2028, aiming to outpace TSMC's A14 chips [14]. Group 4: Financial Outlook - Analysts predict Intel's net loss will increase from $267 million in 2025 to $400 million in 2026, marking its third consecutive unprofitable year [17]. - However, there is an optimistic forecast for profitability in 2027, with expected net profits of $2.3 billion, rising to $4.1 billion in 2028, contingent on the success of its investments in high-NA EUV systems [17].
Intel Just Made a Big Bet on ASML's Next-Gen Technology. Here's Why It Matters in 2026.