Intel Raises Capital Spending to $20 Billion for AI Turnaround

Intel Corporation outlined a comprehensive turnaround strategy at the Deutsche Bank 2026 Technology Conference, prioritizing manufacturing execution and AI-driven data center demand. The company increased its 2026 capital expenditure to $20 billion, funded by a $23 billion equity offering, to support process ramps for the Intel 18A and Intel 14A nodes. Intel reported that 18A yields are exceeding internal milestones, while 14A defect reduction is progressing faster than previous nodes.

To accelerate decision-making, CEO Lip-Bu Goh implemented a significant organizational restructuring, reducing management layers from 12 to 6 and cutting vice president roles from approximately 450 to 200. The company is also shifting resources from its client business toward data center products to address the growth of AI inference and agentic workloads.

Financially, Intel is targeting a long-term gross margin exceeding 50%. The company aims for its foundry business to reach breakeven by the end of 2027 or 2028. Production efforts are distributed across several sites, including expanded output in Ireland and accelerated equipment installation in Arizona, while Oregon serves as the pilot line for Intel 14A and Ohio continues construction on its first module.