While Intel is often discussed through the lens of PC demand cycles and competitive pressure in processors, one of its fastest-growing businesses has attracted far less attention. Beneath the headline narratives, Intel’s foundry and advanced manufacturing services have been expanding at a pace the company has described as approaching 50% year over year, signaling a structural shift in how Intel positions itself within the global semiconductor ecosystem.

The Foundry Business Moves From Concept to Revenue

Intel Foundry Services (IFS) was initially framed as a long-term strategic pivot rather than a near-term growth driver. That perception is now changing. Company disclosures over recent quarters indicate that revenue linked to foundry operations, advanced packaging, and external customer manufacturing has been scaling rapidly from a relatively small base.

This growth is not occurring in isolation. Global semiconductor supply chains are being actively reshaped by governments and corporations seeking geographic diversification, security of supply, and advanced-node capacity outside Asia. Intel’s manufacturing footprint in the United States and Europe places it at the center of this realignment, allowing it to attract customers that prioritize resilience and sovereignty alongside cost and performance.

Why the Market Has Largely Overlooked the Expansion

Despite its pace, the foundry business remains overshadowed by Intel’s core CPU segments, which still dominate revenue and investor attention. Losses, heavy capital expenditure, and margin pressure in legacy divisions have shaped the prevailing narrative, often masking progress in newer segments.

Another factor is scale. Even at 50% growth, the foundry unit is still smaller than Intel’s traditional businesses. Markets tend to discount high-growth segments until they reach material size or profitability. As a result, the strategic importance of this expansion is often discussed in policy and industry circles more than in equity market commentary.

For global investors, including those in Israel with exposure to semiconductors through technology indices and suppliers, this disconnect matters. It highlights how structural transformation can be underway well before it is reflected in headline financial metrics.

Strategic Implications for Intel and the Semiconductor Sector

Intel’s foundry growth positions the company differently from pure-play chip designers and traditional integrated manufacturers. By opening its fabs to external customers, Intel is attempting to compete in a space long dominated by Asian foundries, while leveraging Western government support and long-term contracts.

This shift also has broader market implications. As foundry capacity expands outside Asia, supply-chain risk premiums may gradually adjust, influencing valuations across the semiconductor landscape. Equipment makers, materials suppliers, and advanced packaging firms stand to benefit as capital investment continues.

For Intel, the challenge remains execution. High growth does not automatically translate into profitability, especially in a capital-intensive business. Cost control, yield improvements, and customer retention will determine whether this growth becomes a durable earnings contributor.

Looking ahead, investors will be watching for clearer financial disclosure around foundry revenues, contract announcements with major customers, and signals that growth can be sustained without excessive margin dilution. While risks remain tied to execution and capital intensity, the rapid expansion of this overlooked business suggests Intel’s future may be shaped as much by manufacturing strategy as by product innovation. Whether markets fully reprice this shift will depend on how quickly growth converts into visible, recurring economic value.