It is said that if you build it, they will come, but Intel may be discovering that “they” require a little more persuasion. While the computer giant launches its grand foundry plans, it seems third-party clients aren’t precisely waiting at the door.

Intel shares fell 1.9% to $21.26 on May 14 after CFO David Zinsner delivered some hard reality to investors at the J.P. Morgan tech conference. As much as there is excitement about Intel’s foundry plans and its next-generation 18A node, Zinsner recognized that third-party demand is disappointing for now. The majority of near-term volume will be consumed internally, specifically for next-generation Panther Lake chips that are due within the year.

Time Is Ticking

Zinsner wanted to reassure markets that Intel does not require huge outside orders to make the foundry business profitable and instead, mid-single-digit billions in revenue would be enough to break even. Nevertheless, establishing long-term trust with third-party customers, particularly regarding IP protection and secure supply chains, is still a work in progress. Meanwhile, rivals such as AMD and TSMC recorded respective share gains of 5.8% and 0.7% on the same day.

Acknowledging Leadership

Zinsner recognized the board member and new CEO advisor Lip-Bu Tan for prodding Intel to flatten the organization and to put engineers back on the lab floor. The aim was quicker product cycles and more rapid customer feedback loops, which are particularly crucial as Intel attempts to accelerate its AI roadmap and recapture technological momentum.

Intel price targets are still sparse, varying from a low of $14 to a high of $28.30, with an average of about $21.30. GuruFocus estimates the fair value of the stock at $23.50. Investors are keenly waiting for Q2 guidance for evidence of actual traction in the foundry business.

Aftermath

Lacking substantial third-party pull, Intel’s large foundry bet may be unable to keep pace with entrenched players just as the demand for leading-edge nodes is peaking. For the time being, the market isn’t convinced, and until Intel gets a signature outside customer on board, bearishness is likely to cloud its shares.

Intel’s foundry shift is gutsy, and the long term may be worth it, if they play it smart. As technology doesn’t wait for anyone, and with the semiconductor arms race, delay is expensive. If Intel doesn’t seal external customers in time, it will be left staring at the rearview mirror, and competitors such as TSMC and AMD will zoom ahead while it’s still tying its shoelaces. The plan can be good, but now Intel requires momentum and a huge external contract to demonstrate it is not simply building for itself.