Intel (NASDAQ: INTC) has officially signed a manufacturing agreement with Fortinet, marking a pivotal expansion for its foundry business into the cybersecurity hardware sector. This deal represents the first major customer acquisition under the leadership of CEO Lip-Bu Tan, who took the helm in early 2025.
The Technical Scope of the Intel-Fortinet Deal
Under the terms of the partnership, Intel Foundry will oversee the production of Fortinet’s next-generation Security Processor 6, the engine behind the company’s signature FortiGate firewall line. While Fortinet retains control over the front-end design and architecture, Intel is tasked with the back-end design, advanced packaging, and the actual manufacturing utilizing the Intel 4 process node.
Challenging the TSMC Monopoly
This strategic move is significant for the competitive landscape of the semiconductor industry. By partnering with Intel, Fortinet is actively diversifying its supply chain away from Taiwan Semiconductor Manufacturing Co. (TSMC), which currently maintains a commanding 72% market share in the foundry industry, according to data from TrendForce.
By establishing a foothold in the development of cybersecurity application-specific integrated circuits (ASICs), Intel is carving out a specialized niche. The success of this collaboration could incentivize other cybersecurity firms to shift production toward Intel, providing the company with a viable pathway to challenge TSMC’s long-standing dominance.
Financial Implications for Intel Shareholders
For investors evaluating the impact on Intel’s stock, the data presents a nuanced picture. In the second quarter of 2026, Intel reported total revenue of $16.1 billion, with the foundry business contributing $5.8 billion. Notably, the foundry unit grew by 31%, surpassing the company’s internal target of 25% and signaling that this division is becoming a primary engine for valuation.
However, the stock’s current performance complicates the investment thesis. Intel shares have experienced a 400% gain over the past year. Due to previous losses, the company lacks a meaningful price-to-earnings (P/E) ratio, and its forward P/E of 66 suggests that the stock is currently trading at a premium.
The Long-Term Outlook
While the Fortinet agreement is a bullish indicator for Intel’s long-term foundry strategy, the stock’s high valuation may limit immediate price movement. Investors should view this deal not necessarily as an immediate “buy” signal, but as a critical benchmark. Monitoring whether Intel can replicate this success with other cybersecurity players will be essential, as these agreements are likely to become the primary drivers for Intel’s stock performance in the coming years.