CEO Lip-Bu Tan Just Gave 12 Million Reasons to Buy Intel Stock

In early August, Intel (NASDAQ: INTC) raised $23 billion in equity at $95 per share, up from an initial target of $15 billion. In conjunction, CEO Lip-Bu Tan personally bought $12 million worth of stock as part of the offering.

Just one month before, on Intel's July earnings call, CFO David Zinsner said Intel wouldn't raise more money unless it did "extremely well" in attracting demand for its foundry. After the capital raise at the recent Deutsche Bank Technology Conference on Aug. 26, Zinsner shed more light on how the new billions will be used.

The answers were tremendously bullish, making Intel's current stock price, which sits even below the recent offering price, look like a bargain.

Intel is filling its fabs as fast as it can

While there is a possibility that Intel will use $15 billion of the offering to buy out Brookfield Infrastructure Partners, which owns 49% of Intel's existing Arizona fabs, Zinsner hinted that the new funds will probably go toward new fabs. Zinsner pointed out that Intel must commit to buying a large amount of chipmaking equipment over the next few years, which will require a stronger financial backstop.

The details point to a massive amount of new capacity coming online. Intel will be expanding capacity at its existing Fab 34 in Ireland, which produces the Intel 3 node, along with Fab 52 in Arizona, which produces Intel's new 18A node. Intel is also finishing tooling up Fab 62, another massive Arizona fab next to 52 that will produce 18A variants and possibly 14A, Intel's next node.

But that's not all. At the conference, Zinsner also described how Intel will convert some of its Oregon facilities, which are typically research "pilot" lines, into higher-volume manufacturing lines to support 14A as soon as possible. In addition, Zinsner said Intel was moving as "fast as it could" to build out its Ohio fabs:

There is the ability to have eight mods, or there is two mods per fab, so four fabs in Ohio. Mod one is the one obviously we are working on right now. If we could make it go faster, we would. We are going as fast as we can to get that one ready.

It should be noted that before the agentic AI revolution took off, Intel had slowed the build-out of the Ohio fab system. In early 2025, Intel said it was delaying the opening of that fab until at least 2030, pushed back from an initial target of 2026. Well, today Intel is looking to bring that on "as fast as possible," probably in 2028 or 2029. That's quite a change in the span of a year.

Mods one and two will cost a reported $28 billion, which is roughly the same amount invested in Fabs 52 and 62 in Arizona. In other words, this is a massive amount of capacity in addition to Intel's near-term build.

Finally, Zinsner didn't mention Intel's Fab 38 in Israel, where construction was suspended in mid-2025. However, that Fab "shell" is already complete, and would probably be the fastest to market for producing chips outside of Fab 62. Some commentators have recently pointed to increased activity at the Israel fab and to a new site facility operator position that has been posted. That suggests Intel is also likely looking to equip Fab 38 with tools.

Keep in mind that Fab 34 in Ireland, where Intel makes Intel 3, and Fab 52, where 18A production is ongoing, aren't even at full capacity yet. So when you factor in Fab 62, the first two Ohio fabs, Israel Fab 38, and an expansion of its Oregon facility, Intel's internal capacity should increase severalfold over the next few years.

Given that last quarter's revenue was already over $16 billion, indicating a $65 billion annualized run rate, Intel's revenue could theoretically approach $200 billion over a few years if it fills all these fabs it is now accelerating.

Why is Intel so confident? 14A looks massive

It should be noted that when he took on the role of CEO in early 2025, Lip-Bu Tan said he would slow down prior CEO Pat Gelsinger's aggressive capacity build-out and would only build capacity against committed demand. Intel even said in its Q2 2025 quarterly report that development of the upcoming 14A node wasn't guaranteed unless there was significant external demand.

While Intel hasn't officially announced it has landed external customer commitments for 14A, and likely won't due to customer confidentiality concerns, Zinsner basically admitted as much, noting:

Lip-Bu and the team are now meeting on a weekly basis with customers. They are moving away from just looking at data to thinking about, "Well, how much capacity can I get? What does that supply look like?" We are now at a point where we have conviction around customers on 14A externally...

Image source: Intel.

Later on, Zinsner discussed Intel's innovative EMIB-T packaging, which may offer cost and performance advantages over Taiwan Semiconductor Manufacturing's (NYSE: TSM) CoWoS technology. Zinser noted Intel's packaging technology is leading to new opportunities to cross-sell customers to Intel's front-end foundry capabilities:

[Packaging] is a great on-ramp vehicle to show how we can perform not only from an innovation perspective, but also just the blocking and tackling of operationally, how we provide the parts, when we provide them, what our yields look like in high volume. All of those things get tested in advanced packaging, and we win customers there, and I think there is a great opportunity to cross-sell them on the front end as well. Quite honestly, we've already seen that show up even now.

Not only is Intel apparently winning significant external customer volume for its foundry, but its product team is also apparently bullish on 14A. Zinsner noted that under Tan, management let Intel's internal product team choose its foundry, whether Intel's processes or TSMC's. Zinsner said that even though Intel's internal team is "probably the most cynical bunch out of anybody," it has also committed to designing high-volume products on 14A.

Pat Gelsinger's vision is proving out

It should be noted that former CEO Pat Gelsinger had committed to a massive number of cutting-edge fabs back in 2021 when demand for computing was super-high during the COVID-19 pandemic. The subsequent post-COVID downturn made those bets look ill-timed, as Intel lacked the internal financial resources to complete the ambitious plan.

However, with the agentic AI revolution sweeping the tech industry, Gelsinger's vision now looks prescient. Meanwhile, under Tan, Intel appears to have proven out its manufacturing capabilities and positioned itself as a worthy manufacturing vendor to chipmakers.

The 14A node, now set for high-volume manufacturing in 2028, could mark a pivotal moment. Keep in mind that Gelsinger initially envisioned meeting TSMC competitively on the 18A node, then surpassing it on 14A. 14A will make heavier use of high-NA EUV lithography, in which Intel is a first mover, and it will use Intel's second-generation backside power technology. TSMC hasn't yet introduced those chipmaking innovations into its processes.

At the Deutsche Bank conference, Zinsner also noted that 14A development is "doing better than any of the previous nodes in terms of how quickly we're bringing down the defects." He later added, "We haven't seen this performance since 22 nanometer, which is arguably one of the best nodes Intel's ever put out."

Of note, the 22nm process node came out in 2012, back when Intel was the dominant semiconductor manufacturer and multiple generations ahead of competitors in process technology, before it lost its lead to TSMC during the extreme ultraviolet lithography (EUV) transition around 2019.

Many investors currently chalk up Intel's recent gains to "getting lucky" because traditional server CPUs are in such high demand to serve agentic AI, and that its products aren't really competitive with rivals. However, if Intel meets or exceeds TSMC in process technology with 14A, it should be perceived in an entirely new light. From the looks of the recent capital raise, Tan's insider buy, and Zinsner's commentary, it appears management believes that change is imminent.

Billy Duberstein and/or his clients have positions in Intel and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Intel and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.