Intel Stock Surges 10% on Google TPU Order, Foundry Yields Hit 80%

Intel stock climbed more than 10 percent after reports emerged that Google ordered three million custom chips for its tensor processing units. Wall Street analysts responded by raising their price targets to $135 from $110, signaling confidence in the company's turnaround strategy.

Google orders three million custom chips as advanced node yields improve

The market reaction centers on Intel Foundry Services and its advanced process nodes. The division aims to break even by late 2027 while expanding capacity for its Intel 3, 18A, and 14A manufacturing technologies.

Intel 3 fab capacity in Ireland will grow by 80 percent by 2028 compared to current levels. The company expects 18A node capacity to double over the same period, with yields already reaching 80 percent. EMIB packaging yields for this node sit between 90 and 95 percent.

The next-generation 14A process has begun yield ramp-up through risk production in 2028. Mass production is scheduled for 2029, and Apple is expected to adopt the node after transitioning from an earlier variant. Major clients including Google, Amazon, Meta, and Elon Musk's TeraFab are confirmed or potential customers for Intel Foundry Services.

The IFS division projects steady growth with its DCAI department expanding by 39 percent this year and 30 percent next year. The business unit targets profitability in late 2027 as advanced node capacity scales up.

Intel is expanding its foundry operations to support growing demand for advanced chip production. Intel is building its foundry business to serve major global clients like Google, Apple, and Amazon with advanced manufacturing services.