$Intel(INTC)$ 18A is shaping up to be a huge success for Intel.

CEO Lip-Bu Tan confirmed the manufacturing ramp is progressing in both Oregon and Arizona:

“The ramp of the 18A in both Oregon and Arizona, including Fab 62, our second high-volume 18A fab.”

He also confirmed Clearwater Forest is already shipping for revenue, while Diamond Rapids, Intel's first 18A-P server product, is on track to ramp in 2027.

And the manufacturing improvements are becoming increasingly important.

Intel CFO Dave Zinsner said on the Q3 earnings call:

“Intel 18A costs have declined approximately 40% since Q1, reflecting continued yield and cycle time improvements.”

The manufacturing economics are moving in the right direction:

• Higher yields = more usable chips per wafer.

• Better cycle times = faster production and improved throughput.

• Higher factory utilization = fixed costs spread across more output.

• A richer mix of premium client and Xeon server CPUs = potential margin expansion.

Management reported that 18A yields improved at a double-digit rate, while wafer output on Intel 18A and Intel 3 exceeded expectations.

Intel also reported:

• 18A output approximately 25% above target.

• More than 50% quarter-over-quarter output growth.

Now combine improving yields, falling manufacturing costs, expanding factory capacity in Arizona and Oregon, and the upcoming 18A-P product ramp.

This is how Intel can build a much stronger manufacturing business and improve margins.

The 2027 opportunity is getting increasingly interesting. Intel is trading at bargain prices based on the work accomplished on the manufacturing side.

Wafer-start projections based on Intel and analyst estimates, not official Intel guidance.