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Intel’s (INTC-4.83%) faltering chip manufacturing business could get a boost from its rivals.
Nvidia (NVDA-9.60%) and Broadcom (AVGO-6.94%) are testing chip manufacturing with the chip pioneer on its most advanced 18A process for cutting-edge chips, such as those for artificial intelligence, Reuters reported, citing unnamed people familiar with the matter.
The tests are being carried out as the two chip designers decide on manufacturing contracts with Intel that could be worth hundreds of millions of dollars, according to Reuters — a move that could be a turnaround for Intel’s declining business.
Intel’s shares were up by 3.2% during Monday morning trading, and are up by 22% so far this year.
Advanced Micro Devices (AMD-2.47%) reportedly also is interested in using Intel for manufacturing, but it is not confirmed if the company is testing chips.
An Intel spokesperson told Reuters that it sees “strong interest and engagement on Intel 18A across our ecosystem.”
Neither Intel, Broadcom, nor AMD immediately responded to requests for comment. Nvidia declined to comment.
In September, Reuters reported that Intel’s tests with Broadcom on its 18A process had failed, after Broadcom’s engineers determined it could not be used for high-volume chip production. The current tests with Nvidia and Broadcom are focused on the viability of Intel’s 18A manufacturing process and are not using finished chip designs, Reuters reported, adding that the tests could take months.
In February 2024, Microsoft (MSFT-2.15%) announced that it was tapping Intel’s 18A manufacturing process for a future chip designed in-house.
Former Intel chief executive Pat Gelsinger had started Intel’s contract manufacturing business in 2021, but it has not yet secured a major chip designer partner. Intel previously pushed back the 18A process to 2026, but is now delaying it by another six months, Reuters reported, citing supplier documents and unnamed people familiar with the matter. The delay has to do with qualifying intellectual property for the manufacturing process, according to Reuters.
Intel told Reuters that it plans to “begin ramping production in the second half of this year, delivering on the commitments we have made to our customers.”
Meanwhile, Intel has become an acquisition target for its competitors. Last month, the Wall Street Journal reported that Intel could see its business split in two by separate potential deals with Broadcom and Taiwan Semiconductor Manufacturing Company (TSM-4.71%). Broadcom is reportedly looking into Intel’s chip design and marketing unit, while TSMC is interested in its chip manufacturing plants.