On Tuesday, chip giant Intel officially launched its Core Ultra 3 series of processors, marking a pivotal step in the company's challenging transformation journey.

The AI PC-focused chips made their debut at the Consumer Electronics Show (CES) in Las Vegas and represent Intel's first product manufactured using its latest 18A process technology. Intel stated on Tuesday that the Core Ultra 3 series, codenamed "Panther Lake," has entered mass production, with output gradually ramping up, and order bookings officially commenced this week.

Buoyed by this news, Intel's stock price surged 6.5% during Wednesday's trading session.

In recent years, Intel has seen its market share steadily eroded by competitors like Advanced Micro Devices (AMD) and Arm Holdings, prompting an all-out effort to revive its struggling manufacturing operations. The company had been trapped in a vicious cycle: years of missteps in manufacturing led to less competitive chips, and weak chip sales, in turn, resulted in underutilized factory capacity, making a manufacturing recovery even more difficult.

Former CEO Pat Gelsinger attempted to break this cycle by opening its factories to external customers while accelerating the development of complex manufacturing technologies. Ultimately, however, no major clients signed up to use Intel's foundry services. Analysts noted that Gelsinger also set overly aggressive timelines for technology production, and Intel faced significant challenges in bringing new manufacturing process nodes to market, repeatedly failing to meet its stated goals.

Under the leadership of new CEO Lip-Bu Tan, Intel continues to push forward with reforms for its heavily loss-making manufacturing division, supported by substantial investments from the U.S. government and NVIDIA.

The implementation of the 18A process is Intel's most significant manufacturing technology upgrade in nearly a decade. The successful launch of the "Panther Lake" chips signals that Intel has finally achieved its goal of releasing a product based on its latest manufacturing process—a key hurdle the company had been unable to clear in previous years.

"For Intel, this is a monumental event," said Cory Johnson, Chief Market Strategist at Cognitive Capital Research. "Intel has been facing a credibility crisis... there have been legitimate doubts in the market about the company's ability to deliver on its promises."

Anshel Sag, an analyst at Moor Insights & Strategy, pointed out that while Intel has so far failed to secure anchor customers like Broadcom (AVGO) or NVIDIA for its 18A process, the success of the "Panther Lake" chips could persuade chip designers to adopt Intel's next-generation process nodes, namely 18A-P and 14A.

"In many ways, this is an existential battle for Intel," Sag stated. "Now, they have re-established themselves as a company capable of efficient execution."