Intel Won't Rush Costly Chip Capacity Buildout Despite AI Boom, Even As Rivals TSMC And Samsung Spend Big Bucks: Here's Why

On Thursday, Intel Corp. (NASDAQ:INTC) said it will not accelerate major chip capacity investments without clearer customer commitments, even as rivals Taiwan Semiconductor Manufacturing Co. (NYSE:TSMC) and Samsung Electronics Co. (OTC:SSNLF) ramp up spending.

Intel Prioritizes Discipline Over Speed In AI Expansion

During the company's fourth-quarter earnings call, Intel struck a cautious tone on capacity expansion, pushing back against concerns that it could fall behind in the intensifying AI-driven semiconductor arms race.

Asked whether delaying equipment orders could leave Intel exposed to longer lead times as demand accelerates, Intel CFO David Zinsner said the company is already investing aggressively — but selectively.

"We are aggressively getting tools on Intel 7, Intel 3 and 18A," Zinsner said, adding that Intel plans to ramp wafer starts "as aggressively as possible" on those manufacturing nodes.

Why Intel Is Holding Back On 14A

The restraint, Zinsner explained, applies primarily to Intel 14A, a process node tied closely to Intel Foundry Services and external customers.

"What we’re holding back on is 14A because 14A is really linked to foundry customers," Zinsner said. "It does not make sense to build out significant capacity there until we know that we have customers that will accept that demand."

The comments contrast with more aggressive capacity expansion strategies pursued by TSMC and Samsung, which have been rapidly securing equipment slots to meet anticipated AI chip demand.

Efficiency Gains Seen As Untapped Supply Lever

Intel also said that it believes meaningful supply gains can be achieved without major new capital expenditures — a view that sets it apart from its peers.

Zinsner said Intel's near-term focus is on improving manufacturing efficiency across its existing footprint, including better yields and shorter production cycle times.

"We think we gain a lot of supply just by doing things better with our existing tools," he said, calling these opportunities "more unique to us right now than to other foundries."

Intel Beats Q4 Revenue And Earnings Estimates

Intel reported fourth-quarter revenue of $13.67 billion, topping Wall Street expectations of $13.37 billion, and delivered adjusted earnings of 15 cents per share, well ahead of analysts' forecasts for eight cents, according to Benzinga Pro.

Looking ahead, Intel projected first-quarter revenue between $11.7 billion and $12.7 billion, compared with consensus estimates of $12.49 billion, while guiding for breakeven adjusted earnings, below expectations for five cents per share.

Price Action: In after-hours trading, Intel shares plunged 11.16%. During the regular session, the shares were up by 0.13%, according to Benzinga Pro.

Intel stock scores high on Momentum in Benzinga's Edge Stock Rankings, with a favorable price trend in the short, medium and long terms.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.