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Nvidia and Broadcom Test Intel’s Advanced Manufacturing Process

SAN FRANCISCO/SINGAPORE – Chip manufacturers Nvidia and Broadcom are currently engaged in manufacturing tests with Intel, signaling a possible turning point for the latter’s production capabilities, according to sources familiar with the situation. These tests mark a critical evaluation as both companies weigh multi-million dollar contracts with Intel, which could significantly uplift its beleaguered contract manufacturing sector.

The two firms are evaluating Intel’s 18A manufacturing process, a sophisticated set of technologies designed to produce cutting-edge artificial intelligence processors and complex chips. This assessment comes amidst a competitive landscape dominated by Taiwan’s TSMC, which holds a significant share of the global chip market.

While Advanced Micro Devices (AMD) is also assessing the potential of Intel’s 18A process, it remains unclear if AMD has moved forward with testing chips at Intel’s facilities. AMD representatives have chosen not to comment on the matter.

An Intel spokesperson remarked, “We don’t comment on specific customers but continue to see strong interest and engagement on Intel 18A across our ecosystem.” This implies a growing interest in Intel’s capabilities, even as the test results remain diverse.

The tests being conducted by Nvidia and Broadcom do not encompass complete chip designs; rather, they focus on the fundamental behavior and capabilities of Intel’s 18A technology. Such evaluations often involve buying wafers to address specific components before committing to large-scale production.

Testing phases typically extend over several months, and the timeline for these current tests has not been specifically disclosed. However, past experiences highlight that manufacturing tests do not guarantee future contracts. A previous batch of testing by Broadcom yielded disappointing results and led to ongoing scrutiny of Intel’s capabilities.

These developments unfold against a backdrop of ongoing delays in Intel’s ability to meet the demands of some clients reliant on third-party intellectual properties. This scenario poses challenges to Intel’s ambitions of revitalizing its contract manufacturing segment, an initiative that was at the forefront of former CEO Pat Gelsinger’s strategic vision. Gelsinger’s departure from the role in December raised concerns about the future direction of the company.

The interim leadership has since shelved plans for an upcoming artificial intelligence chip, postponing expectations for any proprietary AI chips until 2027, a delay that may further complicate Intel’s position in an increasingly competitive market.

The U.S. government has also been paying close attention to Intel’s challenges. The administration aims to bolster domestic semiconductor manufacturing in response to global competitiveness, especially from China. Intel is viewed as a critical player for America’s prospects in producing advanced semiconductors within its own borders.

Earlier this year, officials from the administration engaged in discussions with TSMC’s CEO about a potential partnership involving Intel’s manufacturing unit. These talks suggested the possibility of collaborations with other chip designers interested in acquiring stakes in this new venture.

Intel announced agreements with major corporations including Microsoft and Amazon to utilize its 18A process for chip production, although specific details regarding these projects remain scarce. The exact volume of production or the specific applications for these partnerships has not been made public.

Challenges Ahead for Intel’s 18A Process

Intel’s 18A manufacturing process faced a previously announced delay, pushing its availability for contract clients to 2026. Recent insights indicate an additional six-month postponement is likely due to the extended process of qualifying key intellectual properties essential for the technology’s implementation.

Such delays threaten the timeline for a wide range of potential clients who depend on these resources, with expectations now set towards mid-2026 for availability. The reason behind the holdup in qualifying intellectual property remains unclear, but achieving reliability from suppliers is essential for ensuring the process’ effectiveness.

In response to inquiries about the delays, Intel stated its commitment to commencing production in the latter half of this year and anticipates receiving designs from customers soon. Industry experts are monitoring Intel’s progress closely, hopeful that its foundry ambitions will soon enter a more fruitful phase.

Sassine Ghazi, CEO of Synopsys, remarked in a recent interview that Intel’s 18A technology is currently positioned between TSMC’s leading processes and its own prior technologies. “There are many foundry customers observing Intel’s situation, eager to decide on their commitments,” he commented.

A slow rollout of new customer chips could hinder revenue from Intel’s foundry operations, which at present primarily serves Intel’s in-house chip requirements. Projections indicate that Intel’s foundry business could generate approximately $16.47 billion in revenue by 2025, predominantly stemming from its own product lines.

In the past year, revenues in the foundry segment have experienced a sharp decline of 60%, and Intel has indicated that it does not expect to return to profitability in this sector until at least 2027.

Source
finance.yahoo.com