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Introduction
Intel Foundry business is no longer a forgotten sideline. It has become a powerful growth engine for the company, and in early 2026, it landed two of the biggest names in tech: Google and Amazon. These deals signal that Intel’s contract chipmaking is finally competitive with TSMC after years of struggle.
The foundry unit grew 16% in Q1 2026, reaching $5.4 billion in revenue. Customer commitments now stretch into billions of dollars, and the order backlog extends well into 2027. CEO Lip-Bu Tan has made the foundry business a central part of his turnaround strategy, and the early results are promising.
This post breaks down the Intel Foundry business and its recent wins. You will see why Google and Amazon chose Intel. You will learn about the “TSMC overflow” trend. And you will understand why foundry success matters for the stock.
For the earnings report that highlighted this growth, see our Intel Q1 2026 earnings breakdown . For the technology behind these deals, read our Intel 18A and 14A process technology guide .
Google and Amazon: The Dream Customers
The Intel Foundry business achieved a major milestone when Google and Amazon entered advanced negotiations to use Intel’s chip packaging services. These are not small test orders. Reports indicate the potential value of these deals could reach billions of dollars.
Google is reportedly interested in Intel’s EMIB (Embedded Multi-die Interconnect Bridge) packaging technology. This advanced packaging allows multiple chips to be connected inside a single package, improving performance and reducing power consumption. Google could use EMIB for its custom AI accelerator chips, which currently rely on TSMC for manufacturing.
Amazon is exploring a similar arrangement. The company designs its own Graviton server processors and Trainium AI chips. Adding Intel as a manufacturing partner would reduce Amazon’s dependence on TSMC and provide a second source for critical components.
For Intel, these names matter beyond revenue. They serve as validation that Intel’s manufacturing technology is world-class again. When Amazon and Google trust Intel with their most important chips, other potential customers notice.
The TSMC Overflow Effect
The Intel Foundry business is also benefiting from a trend called “TSMC overflow.” TSMC remains the dominant chip manufacturer globally. Its advanced nodes are fully booked years in advance. Many companies simply cannot get enough capacity at TSMC, no matter how much they are willing to pay.
Intel is the only viable alternative for leading-edge chip production. Samsung has also struggled with advanced manufacturing yields. That leaves Intel as the second source for customers who need cutting-edge chips and cannot wait in TSMC’s long queue.
This overflow dynamic is not temporary. As demand for AI chips and advanced processors grows, the capacity gap at TSMC will persist. Intel can capture a meaningful share of this spillover demand. CEO Lip-Bu Tan has said that demand still exceeds supply across all business segments, especially for foundry services.
Why Foundry Success Boosts Intel Stock
The Intel Foundry business matters for the stock for three reasons.
First, it diversifies Intel’s revenue away from its own product sales. Instead of relying entirely on selling Xeon and Core processors, Intel now earns money by manufacturing chips for other companies. This creates a more stable, predictable revenue stream.
Second, it supports higher factory utilization. Intel has invested billions in new manufacturing facilities. Foundry customers fill those factories with orders, spreading the fixed costs across more units and improving overall profitability.
Third, it strengthens Intel’s manufacturing technology. When Intel makes chips for demanding customers like Amazon and Google, its own engineers learn valuable lessons that make its internal products better.
For a look at the risks that could slow this momentum, see our Intel stock risk analysis .
The Road Ahead
The Intel Foundry business still has much to prove. The Google and Amazon deals are in negotiation, not final. Converting these talks into signed contracts will be a key milestone. The 18A and 14A nodes must continue ramping smoothly to provide the manufacturing capacity customers need.
If Intel executes well, the foundry business could become a $20 billion annual operation by 2028. That would transform Intel from a company entirely dependent on its own product success into a diversified chipmaker with multiple growth engines.
Conclusion
The Intel Foundry business has turned a corner. Google and Amazon deals validate Intel’s manufacturing comeback. The TSMC overflow effect provides a steady stream of potential customers. Foundry revenue rose 16% in Q1 2026, and the backlog extends through 2027.
For a company that was written off just a few years ago, the foundry turnaround is one of the most important stories in the semiconductor industry. If Intel continues to win major customers, the stock’s recent rally could have much further to run.
