Intel’s 18A Semiconductor Process: A Crucial Moment for Its Foundry Business

Intel Corporation’s (NASDAQ: INTC) advanced 18A semiconductor manufacturing process is currently under rigorous evaluation by Nvidia Corp. (NASDAQ: NVDA) and Broadcom Inc. (NASDAQ: AVGO). This marks a pivotal moment for Intel’s foundry ambitions, as a successful outcome could secure high-value manufacturing contracts, potentially worth hundreds of millions of dollars. These developments could reshape the competitive landscape of the semiconductor industry, especially as Intel aims to rival Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Foundry in contract chipmaking.

Despite facing setbacks, Intel’s 18A process is being closely watched by industry leaders, policymakers, and investors alike. With additional interest from Advanced Micro Devices (NASDAQ: AMD), Intel stands at a crossroads, where success could redefine its standing in the semiconductor market.

Intel’s 18A Process: A Game-Changer in Semiconductor Manufacturing?

Intel’s 18A process represents the company’s most advanced semiconductor node, designed to compete directly with TSMC’s leading-edge 3nm and upcoming 2nm process nodes. The technology is built to deliver higher power efficiency, improved transistor density, and performance gains that cater to AI, cloud computing, and data center applications.

Key Innovations of the 18A Process:

1. RibbonFET Transistors – Intel’s gate-all-around (GAA) transistor architecture improves performance and energy efficiency over traditional FinFET designs.
2. PowerVia Technology – A novel backside power delivery mechanism that reduces power bottlenecks, enhancing chip performance.
3. AI and High-Performance Computing (HPC) Readiness – Positioned to meet the growing demand for AI and HPC applications, the 18A process aligns with the needs of tech giants like Nvidia and Broadcom.
4. Direct Competition with TSMC & Samsung – If successful, the 18A node could position Intel as a credible alternative to these dominant foundries.

While Intel has not disclosed full details, a spokesperson emphasized the growing engagement from potential customers: “We don’t comment on specific customers but continue to see strong interest and engagement on Intel 18A across our ecosystem.”

Nvidia and Broadcom’s Testing: A Critical Milestone

Nvidia and Broadcom are currently testing Intel’s 18A process by evaluating test wafers. These initial evaluations focus on assessing Intel’s manufacturing capabilities, quality control, and production reliability before any commitments to full-scale chip production.

What This Means for Intel:

• Potential for High-Value Contracts – If Nvidia and Broadcom approve Intel’s process, it could lead to manufacturing agreements worth hundreds of millions of dollars.
• Credibility Boost for Intel’s Foundry Services – Success in these tests could attract other chipmakers seeking alternatives to TSMC and Samsung.
• Pressure to Deliver at Scale – Intel must demonstrate not just technological superiority but also scalability, cost efficiency, and supply chain reliability.

While these tests do not yet signify full production agreements, the outcome will be a crucial indicator of Intel’s foundry competitiveness.

AMD’s Interest in Intel’s Foundry Services

Advanced Micro Devices (AMD) is also reportedly evaluating Intel’s 18A process, though the extent of its involvement remains uncertain. AMD has long relied on TSMC for its chip manufacturing, making its potential shift toward Intel a notable development.

Key Considerations for AMD:

• Diversification of Supply Chain – Exploring Intel’s foundry services could reduce AMD’s dependence on TSMC, mitigating geopolitical risks.
• Evaluating Intel’s Competitiveness – AMD will need to assess whether Intel’s technology meets its performance and cost requirements.
• Long-Term Strategy – If AMD were to commit to Intel’s foundry, it would signal a major industry shift, further legitimizing Intel as a third-party chipmaker.

However, AMD has remained tight-lipped on the matter, leaving industry analysts speculating about its next move.

Intel’s Manufacturing Delays and Challenges

Despite the excitement surrounding the 18A process, Intel has encountered setbacks in its manufacturing timeline. Originally expected to be available for contract manufacturing customers by 2026, Intel has now pushed back the timeline by six months. This delay is attributed to challenges in qualifying crucial intellectual property (IP) required by smaller and mid-sized chip designers.

Implications of Delays:

• Customer Uncertainty – Without certified IP, many potential clients may hesitate to commit to Intel’s foundry services.
• Competitive Disadvantage – While Intel delays, TSMC and Samsung continue advancing their nodes, strengthening their industry leadership.
• Financial Impact – Prolonged delays could affect Intel’s revenue projections and investor confidence.

Despite these concerns, Intel has reiterated its commitment to ramping up 18A production in the latter half of 2025, with customer designs expected to be finalized within the year.

Intel’s Foundry Business Faces Financial Pressure

Intel’s foundry business is central to its turnaround strategy, particularly as U.S. policymakers push for domestic semiconductor production to reduce reliance on Asian foundries. However, the financial performance of Intel’s contract manufacturing division remains a challenge.

Key Financial Highlights:

• Revenue Decline: Intel’s foundry business saw a 60% revenue drop in 2023.
• Projected Break-Even Year: Intel does not expect its foundry business to break even until 2027.
• Revenue Forecast: Analysts estimate Intel’s foundry revenue will reach $16.47 billion by 2025, though the majority of this revenue will stem from Intel’s internal chip production rather than third-party clients.

The absence of major third-party clients remains a significant hurdle for Intel’s long-term foundry aspirations.

Joint Venture Talks: Intel and TSMC?

In a surprising development, U.S. government officials have reportedly discussed a potential joint venture between Intel and TSMC. This initiative aims to bolster Intel’s foundry business by integrating TSMC’s manufacturing expertise.

Potential Benefits:

• Stronger Competitive Position – A partnership with TSMC could enhance Intel’s manufacturing capabilities and credibility.
• Government Support – The U.S. government’s interest suggests potential subsidies or incentives to strengthen domestic semiconductor production.
• Equity Investments from Other Chipmakers – The proposal also includes discussions about other semiconductor firms acquiring stakes in the venture, diversifying risk and investment.

While details remain scarce, such a collaboration would represent a major shift in the semiconductor industry’s power dynamics.

Intel’s Semiconductor Expansion and Future Outlook

Intel’s ambitious expansion plans, including a $28 billion investment in new chip fabrication plants in Ohio, have faced obstacles. With European expansion plans also encountering delays, Intel must navigate key challenges to achieve its foundry objectives.

Key Decisions Ahead:

1. Attracting Third-Party Customers – Securing contracts from Nvidia, Broadcom, or AMD is crucial for Intel’s foundry credibility.
2. Scaling Up 18A Production – Intel must execute its production ramp-up efficiently to maintain competitive positioning.
3. Strategic Partnerships – Possible collaborations with TSMC or other industry players could bolster Intel’s foundry ambitions.
4. Overcoming Financial Pressures – With significant investment required, Intel must balance its long-term foundry goals with financial sustainability.

What’s Next?

• Nvidia and Broadcom’s Evaluation Results: If these tests yield positive results, it could trigger a wave of customer commitments.
• AMD’s Final Decision: Whether AMD adopts Intel’s foundry services could significantly impact industry dynamics.
• U.S. Government’s Role: Further policy support and potential incentives could shape Intel’s future.

Intel’s 18A semiconductor process is at a critical juncture. While interest from Nvidia, Broadcom, and AMD is promising, Intel faces manufacturing delays, financial pressures, and intense competition from TSMC and Samsung. The coming months will determine whether Intel can attract major external customers or continue to rely primarily on its internal chip production.

If Intel successfully executes its 18A roadmap, it could reclaim its position as a leading semiconductor manufacturer, reinforcing U.S. technological leadership in the global chip industry.