The Factories: America's Only Leading-Edge MakerThin moat

Intel (INTC) — moat facet

Intel owns America's only leading-edge chip factories, and they lost $30.7 billion in three years because almost nobody but Intel uses them.

The second facet of Intel's moat is the factory network, and it is both the most distinctive thing Intel has and the thing that loses money. Intel says it is the only company conducting both leading-edge logic research and development and high-volume manufacturing in the United States1, and its Intel 18A process introduced two industry firsts, gate-all-around transistors and backside power delivery2.

Intel Foundry operating loss as a share of revenue (%)-38%2023-77%2024-58%2025-72%Q2 2025-36%Q2 2026Intel Form 10-K FY2025; Q2 2026 10-Q
Losing less of each revenue dollar, still losing.

The economics are poor. Intel Foundry lost $10,318 million in 2025, $13,291 million in 2024 and $7,083 million in 20233, about $30.7 billion over three years4. It is not yet a foundry in the usual sense: only $307 million of its $17,826 million of 2025 revenue came from outside customers5. The company says it has been unsuccessful to date in securing any significant external foundry customers6.

The product groups carry it. Intel Products earned $12,739 million of operating income in 20257; the foundry lost most of that back. Intel as a whole reported an operating loss of $2,214 million8.

2026 brought a better quarter and a bigger commitment. The foundry's loss narrowed to 36% of revenue in the second quarter from 72%9, Intel committed to completing its 14A process with high-volume ramps in 202810, and it raised 2026 capital spending to more than $20 billion11.

The factories are also where the government's money went. Intel received capital-related government incentives of $1,936 million in 2024 and $1,577 million in 202512, and partner contributions of $12,671 million and $4,891 million13, which reduced gross capital spending of $25,122 million and $17,672 million to net figures of about $10.5 billion and $11.2 billion14. Other people have paid for a large share of the plant Intel owns.

The factories are a narrow advantage of national importance and a thin business. What would make them a moat is outside volume: the number to follow is external foundry revenue, $293 million in the second quarter of 202615, and until a customer Intel does not own adds billions to it, the plant is a cost of making Intel's products.

Moat trajectory: Holding steady

Losses narrowed in 2026 and 14A is committed, but outside customers remain unproven.

The number that tests this moat
Reported
Intel Foundry operating loss, full year
$10,318M (2025); $13,291M in 2024

The cost of the factories; a full year below $5bn would mean scale or outside customers are arriving.

Source: Intel Form 10-K, FY2025 ↗
Aspects of the moat
DIG DEEPER 01
18A: Two Firsts at Once
Intel's 18A was first to combine two new transistor technologies in volume, and so far Intel is almost its only customer.
DIG DEEPER 02
Ninety-Eight Percent of Foundry Revenue Is Intel
Intel's foundry sold $17.8 billion in 2025, and about $17.5 billion of it was to Intel.
DIG DEEPER 03
14A: Committed Without an Anchor
Intel committed to building its next generation of factories before any outside customer committed to use them.
DIG DEEPER 04
$105 Billion of Plant
Intel is the only company doing leading-edge chip research and volume manufacturing in America, and its factories are half of everything it owns.
⚠ Threats to the moat
⚠ THREAT 01
The Foundry Sells to Intel at Prices Intel Sets
Intel's foundry loses money partly because Intel decides what it pays its own factories, so the honest figure is the company's combined loss.
⚠ THREAT 02
Thirty Billion Dollars of Losses in Three Years
Intel's factories lost about $30.7 billion from 2023 to 2025, more in 2024 than its product groups earned.
References
  1. ReportedIntel says it is the only company conducting both leading-edge logic research and development and high-volume manufacturing in the United States, and its Intel 18A process introduced two industry firsts, gate-all-around transistors and backside power delivery.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 1 business: products, process technology, competition, manufacturing and customers. — FY2025 · publ. 23 January 2026 · source ↗
  2. ReportedIntel says it is the only company conducting both leading-edge logic research and development and high-volume manufacturing in the United States, and its Intel 18A process introduced two industry firsts, gate-all-around transistors and backside power delivery.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 1 business: products, process technology, competition, manufacturing and customers. — FY2025 · publ. 23 January 2026 · source ↗
  3. ReportedIntel Foundry lost $10,318 million in 2025, $13,291 million in 2024 and $7,083 million in 2023, about $30.7 billion over three years.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 7 MD&A and Note 3: segment revenue, operating income and drivers. — FY2025 · publ. 23 January 2026 · source ↗
  4. Moat Explorer calcIntel Foundry lost $10,318 million in 2025, $13,291 million in 2024 and $7,083 million in 2023, about $30.7 billion over three years.
    Moat Explorer calculation from Intel's reported figures ($ millions unless stated). Segment margins 2025: Client Computing 9,317 / 32,228 = 28.9% (2024: 11,594 / 33,346 = 34.8%; Q2 2026: 2,343 / 8,877 = 26.4%); Data Center and AI 945 / 15,980 = 5.9% (2023), 1,414 / 16,125 = 8.8% (2024), 3,422 / 16,919 = 20.2% (2025), 2,474 / 6,262 = 39.5% (Q2 2026); Intel Products 12,739 / 49,147 = 25.9%. Revenue shares 2025: client 32,228 / 52,853 = 61.0%; data center 16,919 / 52,853 = 32.0%; together 49,147 / 52,853 = 93.0%. Client growth Q2 2026: 8,877 / 7,871 - 1 = 12.8%. Foundry: internal revenue 17,826 - 307 = 17,519, 17,519 / 17,826 = 98.3%; external share 307 / 17,826 = 1.7%; operating losses 7,083 + 13,291 + 10,318 = 30,692. Intel share of x86 server revenue Q1 2026: 100 - 46.2 = 53.8%. Revenue 2025 against 2021: 52,853 / 79,024 - 1 = -33.1%. Headcount 82.3 / 124.8 - 1 = -34%. Government stake 433.3M x $127.39 = about 55.2 bn; purchase funds 5.7 + 3.2 = 8.9 bn. Warrants 241M x (127.39 - 20.00) = about 25.9 bn. Nvidia stake 215M x 127.39 = about 27.4 bn; 215 / 4,994 = 4.3%. Backers 11.0 + 8.9 + 5.0 + 2.0 = 26.9 bn. Apollo 14.2 - 11.0 = 3.2 bn. Mobileye 100% - 23% = 77%. Net debt end-2025: (2,499 + 44,086) - (14,265 + 23,151) = 46,585 - 37,416 = 9,169; 27 June 2026: (1,988 + 48,549) - (12,874 + 16,853) = 50,537 - 29,727 = 20,810. Shares: diluted 4,530 / 4,090 - 1 = 10.8% (2021-2025); outstanding June 2026 5,043 against 4,090 diluted in 2021 = 23% more. China share of revenue 12,694 / 52,853 = 24.0% (2025); 15,532 / 53,101 = 29.2% (2024); China 12,694 / 22,961 - 1 = -44.7% (2021-2025). Gross margin 43,815 / 79,024 = 55.4% (2021); 21,711 / 54,228 = 40.0% (2023). R&D 16,546 - 13,774 = 2,772; R&D share of revenue 13,774 / 52,853 = 26.1% (2025), 16,546 / 53,101 = 31.2% (2024). Operating cash flow to gross capital spending 9,697 / 17,672 = 0.55. All Other external revenue: 54,228 - 32,305 - 15,980 - 547 = 5,396 (2023); 53,101 - 33,346 - 16,125 - 159 = 3,471 (2024); 52,853 - 32,228 - 16,919 - 307 = 3,399 (2025). Trailing EPS to June 2026: -0.06 - (-0.19 - 0.67) + (-0.73 - 2.16) = -2.09. Market value 669.37 / 86.48 = 7.7 times end-2024; share price 127.39 / 29.23 = 4.4 times the 52-week low - segment margins, revenue mix and market shares. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Intel's Forms 10-K, 10-Q, results releases, prepared remarks and market data; operands shown in the source line.
  5. ReportedIt is not yet a foundry in the usual sense: only $307 million of its $17,826 million of 2025 revenue came from outside customers.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 1 business: products, process technology, competition, manufacturing and customers. — FY2025 · publ. 23 January 2026 · source ↗
  6. ReportedThe company says it has been unsuccessful to date in securing any significant external foundry customers.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 1A risk factors and legal proceedings. — FY2025 · publ. 23 January 2026 · source ↗
  7. ReportedIntel Products earned $12,739 million of operating income in 2025; the foundry lost most of that back.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 1 business: products, process technology, competition, manufacturing and customers. — FY2025 · publ. 23 January 2026 · source ↗
  8. ReportedIntel as a whole reported an operating loss of $2,214 million.
    Intel Form 10-K for fiscal 2025 (year ended 27 December 2025) - Item 1 business: products, process technology, competition, manufacturing and customers. — FY2025 · publ. 23 January 2026 · source ↗
  9. ReportedThe foundry's loss narrowed to 36% of revenue in the second quarter from 72%, Intel committed to completing its 14A process with high-volume ramps in 2028, and it raised 2026 capital spending to more than $20 billion.
    Intel Form 10-Q for the quarter ended 27 June 2026 - segments, the Ireland SCIP repurchase, escrowed shares, Intel 14A, customer deposits and debt. — Q2 2026 · publ. 24 July 2026 · source ↗
  10. ReportedThe foundry's loss narrowed to 36% of revenue in the second quarter from 72%, Intel committed to completing its 14A process with high-volume ramps in 2028, and it raised 2026 capital spending to more than $20 billion.
    Intel Q2 2026 earnings call prepared remarks (CEO and CFO). — Q2 2026 · publ. 23 July 2026 · source ↗
  11. ReportedThe foundry's loss narrowed to 36% of revenue in the second quarter from 72%, Intel committed to completing its 14A process with high-volume ramps in 2028, and it raised 2026 capital spending to more than $20 billion.
    Intel Q2 2026 earnings call prepared remarks (CEO and CFO). — Q2 2026 · publ. 23 July 2026 · source ↗
  12. ReportedIntel received capital-related government incentives of $1,936 million in 2024 and $1,577 million in 2025, and partner contributions of $12,671 million and $4,891 million, which reduced gross capital spending of $25,122 million and $17,672 million to net figures of about $10.5 billion and $11.2 billion.
    Intel fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - statements, capital spending and adjusted free cash flow. — FY2025 · publ. 22 January 2026 · source ↗
  13. ReportedIntel received capital-related government incentives of $1,936 million in 2024 and $1,577 million in 2025, and partner contributions of $12,671 million and $4,891 million, which reduced gross capital spending of $25,122 million and $17,672 million to net figures of about $10.5 billion and $11.2 billion.
    Intel fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - statements, capital spending and adjusted free cash flow. — FY2025 · publ. 22 January 2026 · source ↗
  14. ReportedIntel received capital-related government incentives of $1,936 million in 2024 and $1,577 million in 2025, and partner contributions of $12,671 million and $4,891 million, which reduced gross capital spending of $25,122 million and $17,672 million to net figures of about $10.5 billion and $11.2 billion.
    Intel fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - statements, capital spending and adjusted free cash flow. — FY2025 · publ. 22 January 2026 · source ↗
  15. ReportedWhat would make them a moat is outside volume: the number to follow is external foundry revenue, $293 million in the second quarter of 2026, and until a customer Intel does not own adds billions to it, the plant is a cost of making Intel's products.
    Intel Form 10-Q for the quarter ended 27 June 2026 - segments, the Ireland SCIP repurchase, escrowed shares, Intel 14A, customer deposits and debt. — Q2 2026 · publ. 24 July 2026 · source ↗
Sources
Generated September 25, 2026