Two moats. Both
leaking. The fight
is to rebuild them.
Intel was the only company that designed *and* built leading-edge chips. AMD broke the first moat. TSMC broke the second.
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✦ The bottom line
Intel's gross margin was 60% in 2023. It's 35% now. The margin tells you the moat — and it's been cut nearly in half.
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✦ Teach me
Pricing power, eroding
Gross margin is the clearest signal of pricing power. When a company can charge premium prices because nothing else compares, gross margin stays high. When competitors catch up — or surpass them — gross margin gets squeezed.
Intel's gross margin going from 60¢ to 35¢ in three years isn't normal. It's a structural shift — telling you the company is now the price-taker, not the price-maker, across most of its product lines.
Wall Street calls this
Gross margin / moat erosion
Watch gross margin every quarter. If it starts climbing back, the foundry bet is working and pricing power is returning. If it stays in the 30s, the comeback is harder than management is signaling.
Cents kept per dollar of sales · full year 2025
35
¢
Up from 33¢ in 2024 — but down from 40¢ in 2023 and from 60¢ as recently as 2018. The slow march downward is what the foundry bet is supposed to reverse.
Source · 10-K · Consolidated Results — Cost of Sales (Revenue $52.85B; COS $34.48B) · FY2025 · Filed Jan 30, 2026
35¢ on the dollar is the industry-average gross margin for a chipmaker. The problem: Intel was never an industry-average chipmaker. They were the premium one. Looking at the three major US chip companies side by side shows the gap that opened up — and where Intel sits in the new pecking order.
Gross margin · the three big US chip rivals
Cents kept per dollar of sales — full year 2025
Nvidia
75¢
AMD
50¢
Intel
35¢
Nvidia 75¢, AMD 50¢, Intel 35¢. The order is the pecking order. Intel is now the bottom of the three companies it once towered over. The foundry pivot is designed to change this — but it'll take years.