Intel is at a strategic juncture: while artificial intelligence is driving demand for its server processors, the company is also leading the transition to high-aperture extreme ultraviolet (EUV) lithography, a technology that promises to revolutionize chip manufacturing. This dual advantage could solidify its position against competitors like TSMC, which prefers to wait before investing in this equipment.
The semiconductor industry is undergoing a paradigm shift. AI no longer just needs graphics processing units (GPUs), but also high-performance CPUs for inference and agent-based tasks. Intel, traditionally a leader in this segment, is seeing its order backlog expand month by month, allowing it to raise prices and improve its margins.
Demand for CPUs for AI servers is growing unchecked
According to AMD estimates, the CPU-to-GPU ratio in AI data centers is approaching 1:1, compared to the 1:4 or 1:8 ratios seen in chatbot-oriented systems. This shift, driven by the increasing workload of inference and agents, is fueling demand for server processors and, consequently, their prices. Intel, with an order backlog of more than six months, has seen its server CPU prices rise between 10% and 35%.
The company plans to implement an additional 10% price increase next month, according to DigiTimes sources. This scenario of high demand and rising prices will continue at least until the end of the decade. Bank of America forecasts that the total server CPU market will increase fivefold between 2025 and 2030, reaching more than $170.000 billion. Consensus estimates indicate that Intel's revenue will grow 19% in 2026, to $63.000 billion, with further increases in subsequent years.
Intel marks a milestone with High-NA lithography
In the manufacturing sector, Intel has announced that it has processed over one million wafers using its High-NA lithography machines, manufactured by ASML. These machines, the most advanced in the world, allow for the transfer of patterns with greater resolution and detail. This milestone not only demonstrates Intel's technical expertise but also its ability to operate these machines in R&D and production environments.
However, High-NA technology is not without its challenges. Its anamorphic optics reduce the exposure field to 26 x 16,5 mm, necessitating stitching to manufacture large chips. Intel has been working for over two years to optimize this process and is also developing 6 x 12-inch masks to expose full 26 x 33 mm fields without the need for stitching.
TSMC prefers to wait, leaving Intel to fend for itself.
While Intel is forging ahead with High-NA, its main rival, TSMC, has confirmed that it will not adopt this technology until 2030. The reason is purely economic: each machine costs around €350 million , and a state-of-the-art plant requires dozens of them. TSMC believes that, for now, these machines are not profitable and prefers to wait for the technology to mature and become more affordable.
The Taiwanese company plans to unveil its A12 and A13 technologies (1,2 and 1,3 nanometers) in 2029, based on second-generation GAA transistors and NanoFlex Pro technology. However, it has not yet revealed how it will manufacture these circuits without High-NA technology. This could give Intel a competitive advantage in the coming years, especially if it manages to refine its production processes with these machines.
The market views Intel's evolution with optimism.
Analysts are divided, but most see upside potential. According to Tipranks, Intel has 31 analysts recommending: 6 buys, 23 holds, and 2 sells. The average price target is $116,50 , with a high of $200 and a low of $80, representing a nearly 20% change from the previous close. Analysts like Stacy Rasgon (Bernstein) recommend holding with a target of $110, while Gus Richard (Northland) suggests buying with a target of $120. On the other hand, Harlan Sur (JPMorgan) recommends selling with a target of $85.
Following Monday's close, Intel shares were trading at $97,15, with medium-term support at $81,79. Technical indicators show mixed signs, but the overall trend points to a potential price increase if demand for AI CPUs continues.
The combination of sustained demand for server processors and a bold manufacturing strategy puts Intel in an enviable position. While TSMC is playing it safe, Intel is investing in cutting-edge technology and is already seeing results. In Europe and Spain, investors may see this evolution as a turning point for the company, which could capitalize on the rise of artificial intelligence in the coming years.
