Intel's ambitious plan to become a major chip manufacturer for other companies is facing a crucial moment as industry leaders Nvidia and Broadcom conduct manufacturing tests with its advanced technology. This development comes as Intel grapples with delays and searches for its first prominent chip designer customer.
The two tech giants are testing Intel's 18A manufacturing process, a sophisticated series of technologies designed to produce advanced artificial intelligence processors. These previously unreported tests signal early interest in Intel's capabilities, though they're far from a guaranteed commitment. Think of it as a first date - promising, but no wedding bells yet.
Sources familiar with the matter revealed that while these tests don't involve complete chip designs, they aim to evaluate the behavior and capabilities of Intel's 18A process. The stakes are high: successful tests could lead to manufacturing contracts worth hundreds of millions of dollars. It's like auditioning for the role of a lifetime, except the audience consists of semiconductor executives with very deep pockets.
AMD Joins the Queue: Rival Shows Interest in Intel's New Tech
Adding to the intrigue, Advanced Micro Devices (AMD) is also eyeing Intel's 18A manufacturing process, though it's unclear if they've moved beyond window shopping to actual testing. AMD has maintained a diplomatic silence on the matter, while Intel keeps its cards close to its chest, noting only "strong interest and engagement" in their 18A technology.
Timeline Troubles: New Delays Push Production to 2026
However, the path to manufacturing glory isn't without its obstacles. Intel faces potential further delays in delivering chips for some contract manufacturing customers, particularly those requiring third-party intellectual property. The company has already pushed back its timeline by six months, meaning some potential customers might not be able to produce chips on 18A until mid-2026 at the earliest.
The situation has caught the attention of the U.S. administration, which sees Intel as America's best hope for manufacturing cutting-edge semiconductors domestically. In an interesting twist, administration officials recently met with TSMC's CEO in New York to discuss taking a majority stake in a joint venture with Intel's factory unit. It's like arranging a marriage between competitors - complicated, but potentially beneficial for all parties involved.
While Intel has announced deals with tech giants Microsoft and Amazon to produce chips using 18A, the details remain as mysterious as a Silicon Valley startup's stealth mode. The company hasn't disclosed specific products or manufacturing volumes for either partnership, leaving industry observers to speculate about the actual impact of these agreements.
By the Numbers: Intel's $16B Bet Faces Long Road to Profitability
The financial stakes are considerable. Intel's foundry business, which currently primarily produces the company's own chips, is expected to generate $16.47 billion in revenue in 2025. However, the segment's revenue declined by 60% last year, and the company doesn't expect to break even until at least 2027. It's a bit like running a restaurant that currently only serves its own staff - technically operational, but not quite the business model they're aiming for.
Synopsys CEO Sassine Ghazi provided some perspective on Intel's current position, noting that the 18A process performs somewhere between TSMC's most advanced process and its predecessor. Many chip designers are watching Intel's progress with interest, waiting to see if the company can deliver on its promises before committing their designs and dollars.
Why this matters:
- Intel's success or failure in attracting major chip designers could reshape the global semiconductor manufacturing landscape, potentially giving the U.S. its first competitive advanced chip manufacturing capability in decades
- The outcome of these tests could determine whether Intel transforms into a major player in contract manufacturing or remains primarily focused on producing its own chips - a pivotal moment that could influence everything from smartphone processors to AI accelerators
Read on, my dear:
