Nvidia and Broadcom test Intel-made chips

Leading chipmakers Nvidia and Broadcom are conducting production tests with Intel, two people familiar with the matter told Reuters. The move indicates early confidence in Intel's advanced manufacturing technology, which has faced significant challenges in recent years.

The tests, which have not yet been publicly announced, show that Nvidia $NVDA and Broadcom $AVGO are close to deciding whether to enter into chip-cutting agreements with Intel $INTC worth hundreds of millions of dollars. Such a deal could bring Intel significant revenue and strengthen its position in the chip manufacturing market.

Testing is underway on Intel's 18A process, which consists of advanced technologies capable of producing chips for artificial intelligence and other complex applications. This process competes with technology offered by TSMC (TSM), which currently dominates the global chip manufacturing market.

Although the tests are not conducted on complete chip designs, they are intended to verify the functionality and capabilities of Intel's 18A process. Companies often purchase silicon wafers to test individual components before committing to full production.

The tests can take several months, and the outcome is no guarantee that Intel will eventually win new orders. For example, Broadcom's tests last year yielded mixed results, prompting further scrutiny of Intel's foundry capabilities.

Intel is currently facing further delays in the development of its 18A technology for contract manufacturing customers. According to Reuters sources, the mass production launch date has been delayed by another six months due to the need to qualify key patents.

The situation complicates Intel's efforts to compete with TSMC and Samsung in the most advanced chip business. Intel's manufacturing division saw a 60% drop in revenue last year and is not expected to be profitable until at least 2027.

Despite these challenges, Intel announced deals with Microsoft and Amazon to churn out chips on the 18A process. However, the details of these contracts remain unclear.

Many chipmakers are monitoring Intel Foundry's progress and deciding whether to partner with it. If Intel proves its ability to compete with TSMC, it could become a key player in advanced chip manufacturing and help restore U.S. dominance in this strategic industry.

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Source: Yahoo Finance