Introduction: The Intel Story Few Are Watching

When markets talk about Intel, the conversation often gravitates toward missed expectations, competitive pressure from rivals, or the company’s uneven progress in artificial intelligence. Yet beneath the surface, Intel has been cultivating a business that grew by more than 50% in 2025—one that rarely makes headlines but could play a decisive role in its long-term revival.

According to The Motley Fool, Intel’s custom ASIC (application-specific integrated circuit) business reached a $1 billion annualized revenue run rate by the end of 2025. This development, while understated during earnings calls, represents far more than a niche success. It points to a strategic pivot that blends design expertise, proprietary architecture, and manufacturing muscle into a single, integrated offering.

Understanding Custom ASICs and Why They Matter

To grasp why this matters for Intel, it helps to understand what custom ASICs are and why demand is surging. Unlike general-purpose CPUs, ASICs are purpose-built chips optimized at the hardware level for specific tasks. This specialization delivers higher efficiency, lower power consumption, and better performance for targeted workloads.

In the current market, ASICs are especially valuable for networking, data centers, and AI infrastructure. As hyperscalers and telecom operators build increasingly complex systems, off-the-shelf processors are often insufficient. Custom silicon allows them to tailor performance precisely to their needs.

The Scale of the Opportunity for Intel

Intel estimates the total addressable market for custom ASICs at roughly $100 billion. For a company that currently holds less than 1% share, the runway for growth is substantial. According to The Motley Fool, Intel’s management highlighted that demand for networking-related AI chips was a major driver of recent growth.

This surge aligns with broader trends. AI data centers require specialized networking silicon to move massive volumes of data efficiently. As global AI infrastructure expands, demand for these chips is likely to remain robust for years.

For Intel, the significance lies not only in revenue but in strategic positioning. Winning ASIC customers creates downstream opportunities in manufacturing and advanced packaging—areas central to Intel’s foundry ambitions.

Competitive Landscape: Broadcom, Marvell, and Intel’s Edge

The custom ASIC market is not uncontested. Established players like Broadcom and Marvell have deep relationships with hyperscalers and strong design track records. However, Intel brings a differentiated value proposition.

Unlike its competitors, Intel can bundle:

• Custom chip design services
• Proprietary x86 intellectual property
• In-house manufacturing and advanced packaging

This one-stop-shop model is especially compelling when speed to market is critical. As Intel CEO Lip-Bu Tan noted during the earnings call, this integrated approach positions the company to “resolve specialized problems at scale.”

Leadership Matters: Lip-Bu Tan’s Influence

Leadership often determines whether strategic initiatives flourish or falter. In the case of Intel, CEO Lip-Bu Tan’s background is particularly relevant. Before joining Intel, Tan spent more than a decade leading Cadence Design Systems, a cornerstone of the semiconductor design ecosystem.

During his tenure at Cadence, the company transformed into a customer-centric organization and more than doubled its revenue. That experience is directly applicable to Intel’s custom chip ambitions, which demand close collaboration with clients and deep understanding of their technical requirements.

“This is not a new area for us, although it is one that I’m committing significantly more focused resources and investment dollars,” Tan said, referencing his experience at Cadence.

Real-World Deals Signaling Momentum

While Intel has not disclosed every customer, several high-profile agreements hint at the scale of its progress. According to The Motley Fool, Intel signed a deal with Ericsson in 2023 to manufacture custom 5G system-on-chips using its Intel 18A process. In 2024, Amazon Web Services selected Intel to produce custom AI fabric chips and Xeon 6 CPUs.

These partnerships serve two purposes. First, they validate Intel’s technical capabilities. Second, they establish trust with major customers who could expand their engagements over time.

Feeding the Foundry Vision

One of Intel’s most ambitious—and costly—strategic bets is its foundry business. Developing leading-edge manufacturing processes like Intel 18A and the upcoming 14A requires enormous capital investment. For this effort to be sustainable, Intel needs a steady pipeline of external customers.

The custom ASIC business can act as a funnel. By designing chips for customers, Intel gains an opening to offer manufacturing and advanced packaging services. This integrated pathway could be critical in justifying the billions spent on next-generation fabs.

That said, capacity constraints mean the impact will not be immediate. Intel will need time to scale production before custom ASIC wins translate into substantial foundry revenue.

Market Perception Versus Long-Term Reality

Despite these positives, Intel’s stock has faced pressure. The company’s fourth-quarter results and guidance disappointed investors, overshadowing the progress in custom silicon. This disconnect between short-term sentiment and long-term potential is not uncommon in capital-intensive industries.

For patient investors, the question is whether Intel’s underappreciated growth engines can offset near-term challenges. The custom ASIC business, growing rapidly within a vast addressable market, strengthens the argument that Intel’s future may look very different from its recent past.

Risks and Execution Challenges

No analysis of Intel would be complete without acknowledging the risks. Competition remains fierce, and execution missteps could erode confidence. Manufacturing delays, cost overruns, or customer defections would all undermine the custom ASIC strategy.

Additionally, rivals are not standing still. Broadcom and Marvell continue to invest aggressively, and hyperscalers may increasingly pursue in-house silicon designs.

Conclusion: Why Intel’s Quiet Growth Deserves Attention

Intel’s custom ASIC business may not dominate headlines, but its implications are profound. Growing more than 50% in 2025 and reaching a $1 billion run rate, it represents a strategic lever that aligns design, manufacturing, and customer engagement.

According to The Motley Fool, this business could evolve into a multi-billion-dollar operation over the next several years, while simultaneously supporting Intel’s broader foundry ambitions. For observers willing to look beyond quarterly volatility, Intel’s quiet growth engine may prove to be one of the most important stories in the semiconductor industry.