Q3 2025 Key Financials & Foundry / Fabrication Highlights

Intel

1. Intel reported revenue of US$13.7 billion in Q3 2025, up ~3 % year-on-year. intc.com
2. Gross margin was 38.2% (GAAP), representing a major improvement from the prior year. intc.com+1
3. The foundry / fab services segment (“Intel Foundry” or similar) generated revenue of ~US$4.24 billion in Q3. The Motley Fool+2Investing.com+2
4. That foundry segment still operates at a significant loss: operating loss of US$2.321 billion for the quarter. Investing.com+1
5. On the strategic commentary side, Intel emphasised progress on its Intel 18A node (in Chandler/Fab 52), strengthened balance sheet (via U.S. government funding and investments from NVIDIA/SoftBank) and reiterated demand for compute and AI as a driver for its manufacturing business. intc.com+1
6. Guidance for Q4 2025: revenue between US$12.8B-13.8B; non-GAAP gross margin ~36.5%. intc.com+1

TSMC

1. TSMC reported Q3 revenue of US$33.10 billion, up ~40.8% year-on-year and up ~10.1% quarter-on-quarter. pr.tsmc.com+2investor.tsmc.com+2
2. Gross margin came in at 59.5%, and operating margin at 50.6%. investor.tsmc.com+1
3. Node/mix details: 3 nm = 23% of wafer revenue; 5 nm = 37%; 7 nm = 14%. Accordingly, “advanced technologies” defined as 7 nm & below = 74% of wafer revenue. pr.tsmc.com+1
4. Platform/mix details: High-Performance Computing (HPC) ~57% of revenue; smartphone segment ~30%. MacroSpire+1
5. Guidance for Q4 2025: revenue between US$32.2-33.4 billion; gross margin 59-61%. investor.tsmc.com+1

Major Milestones & Strategic Highlights

Intel

1. The ramp of the Intel 18A process at Fab 52 (Chandler, Arizona) is progressing: Intel touts that Fab 52 is now manufacturing the “most advanced logic in the U.S.” for Intel and its customers. intc.com+1
2. The partnership with NVIDIA and SoftBank (equity investment) plus U.S. government funding are meaningful in that they provide capital flexibility and validation of Intel’s foundry ambitions. intc.com+1
3. Improved execution: Intel claims this was its fourth consecutive quarter of improved execution—though the foundry business remains a drag. Tom's Hardware+1
4. Foundry yields and node development: From the earnings transcript, Intel mentions hardening of Intel 18A PDKs and customer engagement on Intel 14A, but yields remain a near-term challenge. The Motley Fool
5. On the flip side: Intel’s guidance suggests a slight revenue drop in Q4; and the foundry business continues to absorb heavy fixed costs and capex before scale benefits.

TSMC

1. Record quarter: TSMC achieved its highest quarterly revenue ever (US$33.10B) and margins remain exceptionally strong for a foundry. Yahoo Finance
2. Advanced node dominance: With 74% of revenue coming from 7 nm & below, TSMC’s node mix strongly favours high-margin, leading-edge processes. pr.tsmc.com+1
3. Platform shift: HPC/AI now drives ~57% of wafer revenue, which underscores the structural shift toward AI/data-center volumes rather than just smartphones/consumer. MacroSpire
4. Raised guidance: TSMC raised its 2025 growth outlook (mid-30% range) and increased its CapEx “floor” to ~US$40 billion from ~US$38 billion, signalling confidence in sustained demand. MacroSpire
5. Global expansion: TSMC continues to expand fabs/packaging outside Taiwan, helping diversify but also adding complexity around cost.

Key Differences & What They Mean

Business Model & Scale

1. TSMC is a pure-play foundry: its entire business is manufacturing for other chip designers (no internal large volume logic business to distract). This gives it maximum focus and scale.
2. Intel is a hybrid: it has internal logic product business (client-PC, data-center, etc) + its foundry / fab services business. The foundry business at Intel is still in ramp-up mode, absorbing costs, and not yet benefitting from the same scale and margin profile as TSMC’s.
3. Because of this, TSMC’s margins (≈60% gross; 50%+ operating) are far ahead. Intel’s foundry segment remains a heavy loss centre (~-US$2.3 B loss in Q3).

Node/Mix & Market Position

1. TSMC is dominating advanced nodes (3 nm/5 nm/7 nm) and is seeing strong demand from AI/HPC, which tends to command premium pricing and higher margins. It also has strong smartphone business supporting it.
2. Intel’s foundry business is incrementally ramping advanced nodes (18A, 14A etc) but is behind in scale and customer traction compared to TSMC. Yield maturity, customer ramp-up, and cost structure are still works in progress.
3. TSMC’s advanced-node mix gives it a structural cost & technology advantage; Intel must catch up and absorb big capex for new capacity (especially in the U.S.), which hurts short-term P&L.

Geography, Scale, and Government/Policy Impacts

1. Intel is benefiting from U.S. government incentives (e.g., CHIPS Act funding), which helps offset some of the capital burden and gives strategic alignment (on-shoring logic manufacturing).
2. TSMC is expanding globally (US, Japan, etc) but the bulk of its volume and margin engine remains in Taiwan for now. Being the scale leader helps it defend cost/technology positions.
3. Policy/tariff risks: TSMC faces export/geo risks (Taiwan/US relationship, China policy, etc). Intel’s U.S. base is a strategic differentiator in the foundry context (for domestic supply chain security).

Margin & Financial Health Implications

1. TSMC’s strong margin position gives it a buffer to invest and continue to scale; it also demonstrates pricing power and high utilization of advanced nodes.
2. Intel’s foundry segment margin is still deeply negative; the full benefits of its investments (Fab 52, 18A node ramp) are still ahead. For Microsoft / AWS style customers, scale, yield and cost-competitiveness will matter.
3. For Intel, improving yields, customer ramp, and scaling advanced node mix will be key triggers for turning the foundry business into a profits engine rather than a drag. Analysts cited that it may take another year or more to reach yield/margin parity. StockStory

Why This Matters for the Industry

1. AI / HPC demand is shifting the economics of the entire foundry/fab ecosystem. Leading-edge nodes (3 nm/5 nm/7 nm) are commanding more of the revenue mix (TSMC: 74% of wafer revenue). This drives higher ASPs, better margins, but also requires scale and investment.
2. Foundry scale and cost structure matter more than ever. A foundry with full utilization and advanced node leadership benefits disproportionately; one in ramp-up faces structural headwinds.
3. Geopolitics and supply-chain security are also bigger variables: fab location, government incentives, customer diversification, and diversification of manufacturing geographies matter.
4. The “catch-up” challenge is huge: Intel is making the investments and strategic moves to become a major foundry player (especially in the U.S.). But the path from investment to scale and margin is long and capital intensive. TSMC’s lead is not just technological but scale, customer base, ecosystems, yield maturity.
5. For the broader chip supply chain (equipment, EDA, IP vendors, packaging, etc) this divergence between scale leaders and catch-up players will shape who wins the next wave of compute (AI, edge, automotive, etc).

Key Takeaways & Outlook

1. TSMC is firing on all cylinders. Record revenues, margin expansion, strong demand for advanced nodes and AI/HPC customers, and raised outlook. The company is well positioned for a multi-year growth cycle.
2. Intel is improving, but its foundry business is still in transition. The core logic business is doing better, but the foundry segment remains a large loss as ramp costs and yield maturity bite. The question is when the ramp turns into profits.
3. For Intel, milestones to watch: customer engagements on 18A/14A, yield improvements, scale of external foundry volume (not just internal), ramp of new fab capacity, margin improvement.
4. For TSMC, milestones to watch: maintaining high utilization, sustaining node leadership (e.g., move into 2nm/1.4nm), managing global fab expansion (especially U.S./Japan), and navigating any export/geo risks.
5. Differentiation in foundry business is widening. Scale, node leadership, customer ecosystem, and global reach are creating a growing gap between the “winners” and “runners-up.”

Final Thoughts

In Q3 2025 we have a clear contrast. TSMC stands as the benchmark: leading-edge technology, massive volume, strong margins, AI-driven demand, and a healthy business model. Intel, while showing signs of recovery and strategic alignment (especially with U.S. policy tailwinds), still faces the heavy lift of converting investments into competitive foundry scale and profitability.

For stakeholders (investors, ecosystem vendors, policy makers), the message is: the foundry/fab business is not just about building shiny fabs—it’s about scale, execution, yield, and margin discipline. Intel is in the investment phase; TSMC is in the execution & scale phase.