Intel's Custom Chip Business Rapidly Grows to $1 Billion Run Rate
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 26 2026
0mins
Should l Buy INTC?
Source: NASDAQ.COM
- Massive Market Opportunity: Intel's custom ASIC business achieved an annualized revenue run rate exceeding $1 billion by the end of 2025, driven largely by soaring demand for networking AI chips, representing a $100 billion market opportunity that could significantly funnel customers into its foundry business.
- Significant Business Growth: The custom ASIC business surged over 50% in 2025 and grew 26% sequentially in Q4, indicating strong market demand and the company's potential in the custom silicon market, despite overall fourth-quarter results falling short of expectations.
- Clear Competitive Advantage: Unlike competitors such as Broadcom and Marvell, Intel can offer custom chip design services along with its proprietary x86 technology, bundled with in-house manufacturing and packaging services, providing a unique edge in rapid market responsiveness.
- Strategic Investment Commitment: Intel's CEO emphasized a commitment to invest more resources in the custom chip market, leveraging his experience at Cadence Design to elevate the company to a leading position in this underdeveloped market segment.
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Analyst Views on INTC
Wall Street analysts forecast INTC stock price to fall
29 Analyst Rating
5 Buy
19 Hold
5 Sell
Hold
Current: 46.480
Low
20.00
Averages
39.30
High
52.00
Current: 46.480
Low
20.00
Averages
39.30
High
52.00
About INTC
Intel Corporation is a global designer and manufacturer of semiconductor products. The Company operates through three segments: Intel Products, Intel Foundry, and All Other. Its Intel Products segment includes Client Computing Group (CCG), Data Center and AI (DCAI), Network and Edge (NEX). The CCG is bringing together the operating system, system architecture, hardware, and software application integration to enable PC experiences. DCAI delivers workload-optimized solutions to cloud service providers and enterprises, along with silicon devices for communications service providers, network and edge, and HPC customers. NEX helps networks and edge compute systems from fixed-function hardware to general-purpose compute, acceleration, and networking devices running cloud native software on programmable hardware. The Intel Foundry segment comprises technology development, manufacturing and foundry services. All Other segments include Altera, Mobileye, Other.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Revenue and Profit Decline: In 2022, Intel's revenue plunged by 20% and net income fell nearly 40%, with a further 80% drop in net income in 2023, reflecting the impact of high inflation and macroeconomic pressures on demand.
- Management Changes: Following $15.9 billion in impairment and $2.8 billion in restructuring charges, Intel's board forced former CEO Pat Gelsinger to resign, appointing Lip-Bu Tan as the new CEO in hopes of revitalizing performance.
- Future Outlook: Despite a rise in gross margin to 34.8% in 2025, Intel reported a GAAP loss of approximately $300 million, as weakness in the PC segment offset gains in data center and AI sales, leaving the success of its rebound uncertain.
See More
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- Strategic Shift: After exiting the consumer PC market last year, Micron has focused on AI memory needs, indicating its commitment to future market opportunities and enhancing its competitiveness in the AI hardware sector.
- Investment Expansion: Micron broke ground on a $100 billion semiconductor factory in New York, expected to create over 9,000 jobs and become the largest semiconductor factory in the U.S., further solidifying its market leadership.
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See More
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- Slow Project Progress: Although NuScale's RoPower project in Romania has received a Final Investment Decision (FID), the facility is not expected to be operational until at least July 2033 due to trial delays, which will impact the company's long-term revenue expectations.
- Contract Signing Challenges: The Memorandum of Understanding (MOU) with the Tennessee Valley Authority (TVA) for potential 6GW capacity development lacks formal contracts, leading to a financial burden of $495 million for the company, increasing operational risks.
- Manufacturing Capability Needs: To achieve scalable production, NuScale must establish a manufacturing supply chain, with management noting that total payments for large projects could exceed billions of dollars, putting pressure on the company's liquidity and financial stability.
See More
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- Debt Crisis Concerns: The U.S. government's increasing debt and reduced foreign purchases of U.S. bonds may lead to soaring bond yields and higher borrowing costs, thereby affecting corporate financing capabilities.
- AI Investment Demand: The estimated $3 trillion required for AI development by 2030 is testing the limits of capital markets, and any systemic shock could lead to a depletion of available funding.
- Historical Lessons: Dalio's warning echoes past market crashes, particularly the role of debt in bursting bubbles, prompting investors to focus on stocks with strong cash flows to navigate potential market contractions.
See More
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- Infrastructure Investment: With rising demand for AI data centers, significant infrastructure investment deals are anticipated, further solidifying India's position as a global hub for AI technology.
- Talent Attraction: India is regarded as an 'AI talent factory,' with over 60% of Global Capability Centers focusing on AI and data development, and 80% of new centers projected to be AI-led in the next six to eight months, indicating a strong demand for tech talent.
- Executive Position Growth: An increasing number of firms are establishing senior leadership roles, such as 'Chief AI Officer,' in India, reflecting a reliance on local talent and a focus on the AI sector, which enhances competitiveness in the global market.
See More
