Intel (INTC.US), a pioneer in the semiconductor industry, currently has partial ownership by the U.S. government. The company has revealed to investors that 2026 will be a critical juncture for its manufacturing technology, when it will become clear whether the company has the conditions to adopt more advanced processes.

Intel Chief Financial Officer Dave Zinsner stated at a technology conference that it won't be until 2026 that the company can determine whether it's ready to approve a process method called 14A. Achieving this milestone has long been viewed as a key component of Intel's turnaround plan.

Speaking at Citi's 2025 Global TMT Conference, Zinsner said: "By sometime in 2026, we'll have a fairly clear judgment on how things are developing." Zinsner reiterated Intel's position that it will only build 14A chip capacity if it secures commitments from external customers. He indicated this stance is simply based on financial common sense.

However, when Intel CEO Lip-Bu Tan first proposed this strategy in July, it still raised concerns among analysts and investors. If Intel doesn't advance the 14A project, it would mean abandoning its efforts to become a technology leader again. These concerns prompted politicians to pay closer attention to Intel, with some even questioning Tan's loyalty to the United States.

Within just a few days, President Donald Trump called for Tan's resignation based on his past relationships with China, and subsequently reached an investment agreement with Intel. The U.S. government acquired approximately 10% of Intel's shares for $8.9 billion.

In an interview, Zinsner stated that Intel would be willing to accept other companies taking stakes in its manufacturing business. However, the agreement with the Trump administration means Intel must continue to maintain majority ownership of the business, making external investment unlikely in the short term.

"It's not completely impossible to do this, but I don't think it will happen in the near term because the timing for investment isn't quite right. But at some point in the future, this situation might arise," he said.

Regarding government ownership, the position is passive shareholding, with the government voting in favor of whatever recommendations the board proposes. Zinsner noted this depends on whether Intel can stick to its commitment to retain the manufacturing business and ownership.

**Intel Gains Government Support But Still Lacks Customers**

The U.S. government's plan to take a stake in Intel brings a powerful supporter to the troubled chipmaker, but Intel still faces the greater challenge of finding sufficient paying customers in the future.

For years, Intel has suffered from declining sales and market share losses, and Wall Street analysts don't believe this funding alone can reverse its decline. However, pressure from President Trump might help Intel's production division secure more customers to justify the cost of expanding domestic manufacturing.

Dan Morgan, a senior portfolio manager at Synovus Trust who has followed Intel since the 1990s, said that if the U.S. owns part of Intel, "Trump becomes your salesman."

This year, the president has successfully secured trillions of dollars in investment commitments to the U.S., although some of these commitments are merely repackaging of existing plans. For example, Apple (AAPL.US) committed to spending $600 billion on domestic expansion, and Taiwan Semiconductor Manufacturing Company (TSM.US) also committed $165 billion to expand its Arizona facilities.

This time, the U.S. government needs to complete a more arduous task: convincing skeptical potential customers to choose Intel for their manufacturing needs. Intel has been trying to compete with TSMC in foundry services (manufacturing chips according to customer designs) but has struggled to prove its capabilities match the industry leader.

Bernstein analyst Stacy Rasgon noted in a report that besides funding, Intel also needs customers, and it's unclear whether the government will "encourage" customers to use Intel's capacity.

It's worth noting that former Intel CEO Pat Gelsinger bet that a factory expansion plan centered around an ambitious new facility in Ohio would turn Intel's fortunes around. The goal was to transform Intel into a chip foundry, producing semiconductors for external customers. This evolving business is also key to TSMC's development into a trillion-dollar company.

CHIPS Act funding was intended to help realize this vision. Biden and Gelsinger even held a groundbreaking ceremony for the Ohio facility in 2022, promising to create 20,000 construction jobs and bring a new beginning to the domestic chip industry.

However, without major external customers, the economic benefits of the facility will be difficult to achieve, especially considering it will use costly cutting-edge technology. Intel has repeatedly delayed the project, which is now expected to be completed sometime in the 2030s.

Seaport Research Partners analyst Jay Goldberg estimates Intel needs to spend about $20 billion to put its next-generation manufacturing technology into use.

Additionally, Rasgon stated that the government's cash-for-equity deal isn't necessarily better than the original CHIPS Act funding. "Funding construction projects without customers may not yield good results for shareholders, and in this case, the U.S. government would be the largest shareholder," he said.

This also won't change Intel's position in the tech industry. The company has already fallen behind in producing chips most favored by artificial intelligence tasks, a field currently dominated by Nvidia (NVDA.US).

Cowen Inc. analyst Joshua Buchalter noted that so-called "hyperscale" companies—large data center operators like Google under Alphabet Inc.—currently invest up to $80 billion annually in new hardware and won't accept inferior-performing chips due to government demands.

He said it's unclear how U.S. investment addresses Intel's lack of competitiveness. "You can't force hyperscale companies to use lower-performing processors, as that would inhibit their global competitiveness," Buchalter said.

TSMC is the preferred chip foundry for many in the tech industry, including Apple, Nvidia, and AMD (AMD.US). However, Intel has yet to prove it can keep pace with global chip designers and manufacturers again, let alone become key to domestic production recovery.

Dan Morgan said: "Intel still needs to deliver on its promises. Can this stake really make a big difference?"