Intel Corp. (NASDAQ:INTC) is targeting a staggering $100 billion market for custom artificial intelligence silicon, leveraging its robust x86 computing franchise and advanced manufacturing network as global AI demand skyrockets.
The Custom Silicon Push
During Intel’s second-quarter 2026 earnings call, CEO Lip-Bu Tan outlined the company’s strategic expansion into purpose-built chips. Recognizing the growing necessity for specialized AI architecture, Tan highlighted Intel’s unique position to dominate this space.
"I think first of all, this is a massive opportunity. I think potentially it’s over $100 billion TAM market," Tan stated. He pointed to strategic collaborations, such as co-developing a next-generation security processor with Fortinet Inc. (NASDAQ:FTNT), as prime examples of Intel’s growing custom silicon momentum.
Manufacturing Advantage
To dominate this massive revenue pool, Intel is relying on its ability to handle both the creation and production of silicon in-house. Tan emphasized that the company’s end-to-end capabilities create a distinct competitive moat against fabless rivals.
"We are the only company that can design, manufacturing, build the entire range of computing solutions from general purpose, traditional CPUs and GPUs, to more purpose-built ASICs and CPUs optimized for agentic AI," Tan noted.
He further elaborated on how the company’s legacy architecture plays into this strategy, adding, "We see tremendous opportunities to leverage our strong x86-based general purpose computing franchise to build more purpose-built computing products for the AI era."
“AI is driving unprecedented demand for compute, and as we continue to execute, Intel is well-positioned to capture sustainable growth across our CPU franchise, ASICs, advanced packaging and vast wafer foundry network,” added Tan.
Accelerating AI Revenue and CapEx
Intel is already seeing tangible financial results from this strategic pivot. Chief Financial Officer David Zinsner reported that the company’s Application-Specific Integrated Circuit (ASIC) business is currently approaching a $2 billion run rate, with revenue nearly tripling year-over-year.
Overall, Intel reported $16.13 billion in total second-quarter revenue—a 25% year-over-year increase. AI-driven businesses contributed approximately 70% of that total.
To support this unprecedented growth, Intel raised its 2026 capital expenditure guidance to over $20 billion to secure necessary tooling, memory, and substrates. "Strong demand for our products continue to outpace our growing supply," Tan said, characterizing the recent quarter as Intel’s “strongest revenue growth in more than fifteen years.”
How Has INTC Performed In 2026?
INTC shares were up 171.63% year-to-date, down 24.23% over the last month, and higher by 326.69% over the year. It closed 2.33% lower at $100.23 per share on Thursday, and it was up 3.47% in overnight trading.
Benzinga’s Edge Stock Rankings indicate that INTC maintains a strong price trend in the long and medium terms and a weak trend in the short term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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