Intel Foundry has signed Fortinet as its first named outside manufacturing client under CEO Lip-Bu Tan, agreeing to build the cybersecurity firm's next-generation security chip. The deal pushes Intel into cybersecurity ASICs and gives it a foothold against Taiwan Semiconductor Manufacturing Co.'s grip on the foundry market, though Intel's stretched valuation still leaves investors cautious.
Intel Foundry will manufacture Fortinet's next-generation Security Processor 6, the chip that powers the company's FortiGate firewall line. Fortinet supplies the front-end design and architecture, while Intel handles the back-end design, advanced packaging, and manufacturing on its Intel 4 process node.
Fortinet becomes Intel Foundry's first named client
The agreement makes Fortinet the first named outside customer under CEO Lip-Bu Tan. Tan took the top job in March 2025. The Fortinet agreement landed on July 21.
A wedge against TSMC's dominance
TSMC still controls 72% of the foundry market, according to TrendForce. Winning Fortinet could push other cybersecurity companies toward Intel as well, helping the company build a niche that chips away at TSMC's lead. The deal also follows Microsoft's earlier disclosure that it plans to build a custom chip on Intel's 18A process, giving Intel Foundry named customers spanning cybersecurity and cloud infrastructure.
Foundry revenue already outpaces targets
Intel Foundry generated $5.8 billion of Intel's $16.1 billion in second-quarter 2026 revenue. Foundry unit revenue grew 31%, above the company's 25% target, a pace that already outruns management's own goal for the unit.
Valuation keeps investors cautious
Even so, Intel shares have gained 400% over the past year, leaving the stock with a forward P/E of 66, so investors may hesitate to buy on the Fortinet news alone for now. The bigger test sits further out: Intel's 14A process node, still years from production, will determine whether the company can compete at the frontier of chip manufacturing.
Sources: Fool, Crypto Briefing
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