By Max A. Cherney and Fanny Potkin
SAN FRANCISCO/SINGAPORE (Reuters) – Sources familiar with the matter revealed that chip designers Nvidia and Broadcom are currently conducting manufacturing tests with Intel, showing early faith in the company’s advanced production methods. These tests, previously unreported, suggest that the companies are nearing a decision on potentially awarding substantial manufacturing contracts to Intel. Such a decision could bring significant revenue and validation to Intel’s contract manufacturing business, which has faced setbacks and is yet to announce a prominent chip designer client.
Advanced Micro Devices is also evaluating Intel’s 18A manufacturing process for its own needs, although it is unclear if they have submitted test chips for evaluation at Intel’s facility. When asked for comment, AMD declined to provide further details.
An Intel spokesperson stated, “We do not disclose information on specific customers but are encouraged by the strong interest and collaboration surrounding Intel 18A across our ecosystem.”
Nvidia and Broadcom are utilizing Intel’s 18A process for these tests, a suite of technologies capable of producing sophisticated artificial intelligence processors and other complex chips. This process competes with similar offerings from Taiwan’s TSMC, a dominant force in the global chip market. Nvidia declined to comment, while Broadcom did not respond to requests for input.
It is important to note that these tests focus on specific components rather than full chip designs, aiming to assess the behavior and capabilities of Intel’s manufacturing process. Test periods can span several months, and the exact start date of these evaluations remains unspecified.
While these manufacturing tests represent a positive development, they do not guarantee that Intel will secure new business in the future. Past reports indicated that a set of tests by Broadcom fell short of expectations, prompting a reevaluation of their collaboration with Intel.
Amidst these developments, concerns have arisen regarding potential delays in Intel’s chip deliveries for certain contract manufacturing customers reliant on third-party intellectual property. This scrutiny comes in the wake of former CEO Pat Gelsinger’s departure, who aimed to revitalize Intel through its foundry business before being dismissed by the board in December.
The interim co-CEOs have put on hold the company’s upcoming artificial intelligence chip project, postponing the prospect of an in-house AI chip until at least 2027. Intel’s struggles have attracted the attention of the U.S. administration, particularly under President Donald Trump’s push for American manufacturing resurgence and competition with China. Intel is viewed as a crucial player in the U.S.’s quest to domestically produce cutting-edge semiconductors.
Recent discussions have taken place between administration officials and TSMC’s CEO, C.C. Wei, regarding a potential majority stake acquisition in Intel’s factory division, with the possibility of other chip designers also investing in this venture. TSMC and Intel have refrained from providing comments on these talks.
Intel has recently announced deals with Microsoft and Amazon.com to produce chips using its 18A process, but specific details remain scarce. It is unclear which chip Microsoft intends to manufacture using Intel’s factories, and the exact product involved in Amazon’s case has not been disclosed either. The volume of manufacturing represented by these deals is also unknown.
The 18A process, originally scheduled for 2026, has faced further delays for potential contract manufacturing clients. According to supplier documents reviewed by Reuters and sources familiar with the situation, Intel has postponed its timeline by an additional six months. This delay is attributed to the lengthier-than-anticipated process of qualifying crucial intellectual property for the 18A process. Without the necessary qualified intellectual property foundation that small and mid-size chip designers depend on, a significant portion of potential customers may be unable to produce chips on the 18A process until at least mid-2026.
The reasons behind the delay in intellectual property qualification remain unclear. This qualification process involves the supplier guaranteeing that their intellectual property is compatible with a given manufacturing process. When asked about the delay, Intel stated that it plans to begin ramping up production in the second half of the year as per its commitments to customers. The company also expects to receive designs from customers for production in the current year.
Many chip designers are closely monitoring Intel’s foundry progress in the hope of utilizing its manufacturing capabilities in the near future, according to industry experts. Synopsys CEO Sassine Ghazi mentioned in an interview after the company’s financial results that Intel’s 18A process currently performs between TSMC’s most advanced process and its predecessor. Synopsys provides essential intellectual property for Intel’s foundry.
Ghazi highlighted that numerous foundry customers are waiting to see Intel’s progress before making commitments. A delay in mass-producing customer chips could impact revenue from Intel’s foundry business, which currently focuses primarily on producing chips for the company itself. Intel is projected to generate significant revenue of $16.47 billion from the foundry business in 2025, although most of this revenue comes from internal sources.
The foundry segment’s revenue declined by 60% last year, and Intel has indicated that it may not break even until at least 2027. Additional reporting on this matter was provided by Wen-Yee Lee in Taipei and Stephen Nellis in San Francisco. The editing credits go to Kenneth Li, Rod Nickel, and Richard Chang, with contributions from Max A. Cherney in San Francisco and Fanny Potkin in Singapore.
