Intel (INTC) said it will spend more on tools in 2026 than it did in 2025, a potentially positive sign for chip equipment making companies.
Intel’s CFO David Zinsner said on the company’s earnings call that previously they said capital expenditure, or CapEx, would be down, but are now planning for a range of flat to down slightly and for expenditures to be more weighted to the first half.
“It’s actually down significantly in space. So we’re spending a lot less in space. We think we have a good footprint in terms of cleanroom. And what we’re devoting more of our dollars to is tool. So we are ramping up tool spending quite a bit in ’26 relative to ’25 to address this supply shortfall as well,” said Zinsner.
Zinsner noted that CapEx in 2026 would be to support demand in 2027 and beyond.
Intel’s stock fell about 16% on Friday after the company’s earnings results revealed a weaker-than-expected outlook for the quarter in progress and supply constraints continue to affect gross margins.
Intel said in its 10-K regulatory filing that as of Dec. 27, 2025, it had commitments for capital expenditures of $9.1B for 2026 and had $3.7B in capital expenditures committed in the long term.
The company noted that commitments for capital expenditures totaled $12.8B as of Dec. 27, 2025 versus $20B as of Dec. 28, 2024.
On a query that competitors, Taiwan Semiconductor Manufacturing (TSM) and Samsung Electronics (SSNLF) are aggressively slotting for equipment delivery, if Intel too would do so, Zinsner noted that the company is doing so currently.
“I mean we are aggressively getting tools on Intel 710, Intel 3 18A, that is happening. And we will be increasing our wafer starts as aggressively as possible on those nodes. What we’re holding back on is 14A because 14A is really linked to foundry customers, and it does not make sense to build out significant capacity there until we know that we have the customers that will accept that demand,” Zinsner noted.
Intel X710 is the company’s series of 10 Gigabit Ethernet network adapters designed for servers and data centers. Meanwhile, Intel 3 is the company’s 3nm-class semiconductor process, and Intel 18A is the company’s 2nm-class manufacturing process.
There was no change in the company’s disclosure about Intel 14A — the company’s next-generation, sub-2nm manufacturing process technology.
The company said in the filing that “if we are unable to secure a significant external customer and meet important customer milestones for Intel 14A, we face the prospect that it will not be economical to develop and manufacture Intel 14A and successor leading-edge nodes on a go-forward basis. In such event, we may pause or discontinue our pursuit of Intel 14A and successor nodes and various of our manufacturing expansion projects.”
Meanwhile, Taiwan Semiconductor expects its capital budget to be between $52B and $56B in 2026. The company noted that about 70% to 80% of the 2026 capital budget will be allocated to advanced process technologies. “In 2025, we spent USD 40.9 billion as compared to USD 29.8 billion in 2024 as we began to raise our level of capital spending in anticipation of the growth that will follow in the future years,” said TSM’s CFO Wendell Huang on the company’s fourth quarter earnings call.
Huang noted that the company is facing increasing manufacturing cost challenges due to the rising cost of leading nodes.
“For example, the cost of tools are becoming more expensive and process complexity is increasing. As a result, the CapEx dollar required to build 1,000 wafer per month capacity of N2 is substantially higher than 1,000 wafer per month capacity for N3. The CapEx per k cost for A14 will be even higher,” Huang added.
Huang noted that in the last three years, the company’s CapEx dollars amount totaled $101B and is expected to be significantly higher in the next three years.
Spending on chip equipment tools is a positive for tool makers such as ASML (ASML), Applied Materials (AMAT), Lam Research (LRCX), and KLA (KLAC).