Intel’s balance sheets haven’t been looking good for a long time now, overshadowed by AMD’s incredible success in the semiconductor market. But its strategy of returning to the fundamentals seems to be bearing fruit, with Intel posting profits in its 2025 Q3 performance, beating expectations.

But is it really the turning point that marks Intel’s return to success? Or just a temporary improvement due to one-time cash infusions?

Intel’s Difficult Position

There was a time when Intel was the dominant player in the semiconductor space. Its chips were the best, its foundry business was booming, and between enterprise clients and consumer sales, its profit margins were high.

But then the industry left it behind. There isn’t one particular company or reason as to why Intel declined, only the general impact of the economy of scale. Semiconductor manufacturing moved to Japan, Korea, China, and then Taiwan, producing memory and processor wafers at far lower prices than Intel could.

Intel bet on gaining an edge through superior technology, but even in that regard, they were quickly outpaced by TSMC, which went on to become the premier supplier of CPUs to the world. Intel’s competitors went fabless, relying on TSMC’s foundries to produce their designs, letting them affordably compete in the market.

The AMD Factor

While Intel had lost the DRAM and mobile market pretty early, it managed to maintain its position in the computer processor market, beating AMD chips on most metrics. But with the release of AMD’s Ryzen lineup, this was no longer true. While Intel delayed its new architecture, the Ryzen outperformed Intel’s chips at a much lower cost and power consumption.

Fast forward to now, and AMD Ryzen processors dominate the market, while Intel’s market share continues to drop. The fact that its previous two generations of processors were using the same architecture, refreshed, did not inspire confidence either.

So What is Intel Doing?

Instead of giving up on its foundry business and simply becoming another fabless player, Intel decided to double down. Intel intends to expand on its lithography process until it can produce cutting-edge chips entirely in-house.

This would give the company complete control over every stage of the CPU production process, allowing it to be more efficient with its designs and score higher margins. It is easier said than done, however.

Investing in the Future

For the past few years, Intel has been pouring money into improving its foundries, attempting to reach parity with TSMC. Unfortunately, semiconductor manufacturing requires massive investments into infrastructure, and this has been eating up Intel’s revenue, leading it to report losses for year after year.

A lot of hope rides on Intel’s new 18A process, aiming to steal the lead from TSMC’s best 2nm chips. If successful, this could not only boost sales and performance of Intel’s own processors but also bring more customers to its foundry business, marking Intel as a strong alternative to TSMC.

The Unexpected Support

It’s not all doom and gloom for Intel, though. The US government has realized the importance of having domestic semiconductor manufacturing and has taken steps to fund such endeavors.

The CHIPS Act was conceptualized to help subsidize efforts by the private sector to set up cutting-edge semiconductor fabs, and Intel has been a beneficiary of it. More recently, the administration has directly invested in the company, in an unprecedented move that is usually reserved for bankrupt firms.

It’s not just the government that is betting on Intel, either. NVIDIA, the leading GPU manufacturer, has also invested significantly in the company and is already forging a partnership to produce its new chips on Intel’s fabs. They are joined by SoftBank, the global investment group known for backing successful rising stars.

Is Intel out of the Woods Now? 

While the healthy Q3 performance and the bevy of external investments are a good sign of industry confidence in Intel’s progress, the battle is not won yet. Intel is yet to hit the stage where it executes on the strategies it has been building up, and that will be the real test.

If Intel’s 18A node can actually deliver on the promises and manage to produce better chips than AMD, then it would put the company in a fighting position again. Such an achievement would also demonstrate the potential of Intel’s foundries, and it will start getting other fabless players as its clients.

Of course, Intel will also need to sustain this momentum and keep up on the progress – the semiconductor industry is one of cut-throat competition, and any delays can once again see Intel left behind.