NVIDIA has postponed testing Intel's 18A process, causing Intel's stock to drop by 5% in pre-market trading. Despite Intel stating that its 18A and the next-generation 14A technologies are proceeding as planned, the market remains skeptical about the competitiveness of the company’s advanced processes. This move could affect its competitive position against Taiwan Semiconductor in the foundry business. Previously, Intel received a $5 billion equity investment from NVIDIA, but without a manufacturing commitment.
On December 24, according to a report by Reuters, $NVIDIA (NVDA.US)$ tested $Intel (INTC.US)$ Intel's 18A process but has suspended further advancement. Intel's stock fell by as much as 5% in pre-market trading and is currently down 3%.
Despite Intel's momentum in deal-making, its manufacturing division continues to face challenges in independently producing high-quality chips. According to two people familiar with the matter, NVIDIA recently tested whether to use Intel’s 18A process technology for chip production but has halted progress on this plan. NVIDIA did not respond to requests for comment.
An Intel spokesperson stated that the company's 18A manufacturing technology, used for producing advanced chips, is 'progressing well,' and noted that its next-generation process, named 14A, 'continues to receive significant attention.' The 14A process is expected to produce chips with higher performance and energy efficiency. However, no further details were provided regarding NVIDIA’s decision to halt testing.
The suspension of this test has raised questions about the feasibility of Intel's advanced manufacturing technology, which the company has regarded as a key element of its turnaround strategy and competition against Taiwan Semiconductor in the wafer foundry business.
In September this year, Intel and NVIDIA announced a major collaboration. Under the agreement, Intel will develop custom x86 CPUs for NVIDIA’s AI infrastructure platform and will also create x86 system-on-chips integrating NVIDIA RTX GPU chips for personal computing devices. As part of the partnership, NVIDIA committed to investing $5 billion to purchase Intel’s common stock at $23.28 per share, subject to regulatory approval.
Notably, when NVIDIA invested $5 billion in Intel, it did not commit to using Intel’s manufacturing services. During the joint announcement of the collaboration with NVIDIA’s Jensen Huang, Intel CEO Lip-Bu Tan stated: 'At this stage, we are focused on collaborative efforts.'
Intel CEO Lip-Bu Tan’s ability to broker deals is becoming a catalyst for the company’s turnaround. This Intel CEO has secured a commitment from the U.S. government to invest billions of dollars to acquire nearly 10% of the company’s shares, granting Intel a 'too big to fail' strategic status. Since Lip-Bu Tan took office, Intel’s stock price has risen approximately 80%, outperforming both the S&P 500 Index and NVIDIA during the same period.
Editor/jayden