Intel (INTC) has gained early interest from major chip designers Nvidia (NVDA) and Broadcom (AVGO), as the two companies conduct manufacturing tests using Intel’s advanced 18A process. The tests, which have not been previously reported, signal that Intel may be inching closer to securing significant manufacturing contracts—potentially worth hundreds of millions of dollars. However, ongoing delays and uncertainties continue to cast doubt over Intel’s ability to compete with industry leader Taiwan Semiconductor Manufacturing Company (NYSE: TSM).
Testing the Waters
Nvidia and Broadcom are testing Intel’s 18A process to assess its capability in producing high-performance artificial intelligence (AI) processors and other complex chips. While these evaluations are a positive step for Intel’s foundry ambitions, they do not guarantee that the companies will commit to large-scale production. Chip designers frequently purchase test wafers to analyze performance before fully committing to mass production.
Advanced Micro Devices (NASDAQ: AMD) is also reportedly evaluating Intel’s 18A process, though it remains unclear if AMD has sent test chips to Intel’s facilities. The company declined to comment on the matter.
Despite the uncertainty, Intel’s stock rose 5% in premarket trading on Monday following the news.
Delays and Setbacks Cloud Intel’s Foundry Prospects
Intel’s contract manufacturing business has faced multiple challenges, with repeated delays in its 18A process. Originally scheduled for 2026, recent reports indicate that the timeline has been pushed back by another six months due to delays in qualifying crucial intellectual property (IP) needed for small and mid-sized chip designers. Without these fundamental building blocks, potential customers may not be able to manufacture their chips on Intel’s platform until mid-2026.
Intel’s foundry business was a key pillar of former CEO Pat Gelsinger’s revival strategy, but his departure in December and the company’s subsequent decision to halt its AI chip development until at least 2027 have raised concerns about Intel’s ability to regain market dominance.
U.S. Government Interest and TSMC Talks
Intel’s struggles have attracted the attention of the U.S. government, which sees the company as critical to reducing reliance on foreign semiconductor manufacturing. Reports suggest that the Biden administration has explored the possibility of TSMC taking a majority stake in a joint venture within Intel’s foundry unit, potentially involving investments from other chip designers.
Despite these talks, Intel has yet to secure a high-profile customer for its 18A process. The company previously announced deals with Microsoft (MSFT) and Amazon (AMZN) for chip production, but details remain scarce, leaving uncertainty about the scale of these agreements.
Uncertain Path Forward
Intel’s foundry business faces an uphill battle as it attempts to establish itself as a viable alternative to TSMC. The company expects to generate $16.47 billion in foundry revenue by 2025, but the vast majority of that will come from internal chip production rather than external customers.
With revenue for its foundry segment down 60% last year and expectations of breaking even pushed to 2027, Intel’s ability to secure long-term commitments from Nvidia, Broadcom, and others remains a critical factor in its turnaround efforts.
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