Nvidia And Broadcom Test Chip On Intel Manufacturing Process

Intel, the only US hope for producing chips in the country (photo: x @ratwave)

JAKARTA - Chip designers Nvidia and Broadcom are conducting manufacturing trials with Intel, according to two sources familiar with the matter. The test shows early confidence in Intel's advanced production techniques, although the company still faces major challenges.

This trial, previously unreported, indicates that the two companies are getting closer to deciding whether to invest hundreds of millions of dollars in a manufacturing contract with Intel. This decision has the potential to be a big advantage for Intel and provide validation to its foundry business, which until now has not yet received a major customer among chip designers.

Advanced Micro Devices (AMD) is also evaluating whether Intel's 18A manufacturing process is suitable for their needs, but it is not yet known if they have delivered chips for testing. AMD declined to comment.

"We don't comment on specific customers, but we continue to see a strong interest and involvement in Intel 18A across our ecosystem," an Intel spokesperson said.

Tests by Nvidia and Broadcom used Intel's 18A process, namely a series of technologies that have been developed over the years to produce artificial intelligence processors (AI) and other complex chips. This 18A technology competes with similar technologies from Taiwan Semiconductor Manufacturing Co (TSMC), which currently dominates the global chip market.

However, this test does not cover the overall chip design, but only aims to test Intel's 18A behavior and process capabilities. In the semiconductor industry, chip designers often buy wafers to test certain components before deciding mass production.

Although this test lasted for several months, there is no guarantee that Intel will win a new business contract. Last year, Reuters reported that Broadcom's test results disappointed its executives and engineers. However, Broadcom at that time stated that they were still evaluating Intel Foundry.

Amid efforts to attract new customers, Intel is still facing major challenges, including potential delays in providing chips for contract manufacturing customers that rely on technology from third parties. Two additional sources as well as documents obtained by Reuters revealed that there is a possibility of further delays in meeting customer demand.

Intel's foundry business success is a major part of Pat Gelsinger's former CEO's strategy to revive the company. However, the board of directors sacked Gelsinger last December, and instead, two interim CEOs halted Intel's AI chip project, which delayed Intel's AI prospects for at least until 2027.

Intel's condition has attracted the attention of US President Donald Trump, who wants to restore the dominance of US semiconductor manufacturing and reduce dependence on China. Intel is currently considered the only US hope for producing the most advanced chips in the country.

This year, US government officials met with TSMC CEO, CC Wei, in New York to discuss the possible majority ownership in a joint venture with Intel's factory unit. The talk also includes the possibility of other chip designers buying shares in the joint venture.

TSMC declined to comment, and Intel did not respond to questions regarding this meeting.

Intel has previously postponed the launch of the 18A process for contract manufacturing customers until 2026. Now, according to supplier documents reviewed by Reuters and two sources familiar with the matter, Intel is again delaying the schedule for the next six months.

This delay is due to the length of the intellectual property qualifications (IP) process which is important for 18A technology. Without eligible IPs, many small and medium chip designers cannot use this technology until at least mid-2026.

It is unclear what causes delays in this qualification process, but typically, IP qualification includes guarantees from suppliers that the technology can function in certain manufacturing processes.

When asked about this delay, Intel stated that it would "start an increase in production in the second half of this year, in accordance with the commitments we have made to customers." The company also added that it hopes its factories will start accepting chip designs from customers this year.

Many chip designers are currently still waiting for Intel Foundry's development before deciding whether they will commit to using Intel's production facilities.

Synopsys CEO Sassine Ghazi said that Intel's 18A process currently performs among TSMC's most advanced technologies and its predecessor. "Currently, there are many foundation customers waiting. They are wondering, 'Do I have to commit or not?'" said Ghazi.

If Intel fails to produce large amounts of chips for customers, then Intel's foundry revenue could remain low. Currently, Intel's foundry segment mostly only produces Intel's own internal chips.

Intel is expected to generate revenue of 16.47 billion US dollars (Rp271.4 trillion) from the foundry business by 2025, but nearly all of these revenues come from chip production for internal companies. Intel's revenue from the foundry segment fell 60% last year, and the company has said it will not break evenly until at least 2027.