Intel (NASDAQ: INTC) shares climbed nearly 4% in early trading on Friday following a Reuters report that Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) are conducting manufacturing tests using Intel’s advanced 18A chip fabrication process. This development signals potential progress for Intel’s foundry ambitions as it seeks to challenge Taiwan Semiconductor Manufacturing Co. (NYSE: TSM) in the high-stakes semiconductor industry.
Intel’s 18A Process: A Game-Changer in the Making?
The 18A process, Intel’s most advanced manufacturing node, is designed to produce high-performance chips optimized for artificial intelligence, data centers, and other cutting-edge applications. While Nvidia and Broadcom are not yet testing full-scale chip designs, they are assessing how Intel’s process handles specific components. Such evaluations are routine and can take months before customers commit to mass production.
An Intel spokesperson declined to confirm specific customer engagements but noted that the company continues to experience “strong interest and engagement on Intel 18A across our ecosystem.”
Mixed Sentiment Among Investors
Despite the stock rally, investor sentiment remains divided. A Stocktwits poll revealed that while many traders consider Nvidia and Broadcom’s interest in Intel a “huge win,” 35% of respondents remained cautious, emphasizing that testing does not guarantee production contracts.
Retail sentiment on Stocktwits showed a slight improvement, but Intel’s stock remains in “bearish” territory. One investor pointed out that “test chips are routine practice, and Intel needs to show real change” before earning full confidence. Others speculated that geopolitical concerns and U.S. government incentives could push Nvidia toward using domestic manufacturing options like Intel’s foundry.
Challenges Ahead: Delays and Technical Barriers
While the 18A process represents a crucial part of Intel’s turnaround strategy, the company still faces significant challenges. Intel recently announced that its $28 billion chip fabrication plant in New Albany, Ohio, will not be completed until 2030, a delay that raises concerns about its long-term competitiveness.
Additionally, Intel’s stock has struggled over the past year, declining 44%. The company has repeatedly failed to break above its 200-day simple moving average (SMA), a key technical indicator that many traders watch closely.
Intel’s Foundry Strategy in Focus
Intel’s pivot toward contract manufacturing, or its foundry business, was central to former CEO Pat Gelsinger’s turnaround plan before his unexpected departure in December. With no immediate successor named, uncertainty looms over the company’s leadership and strategic execution.
The interest from Nvidia and Broadcom in Intel’s 18A process suggests that the company may still have a chance to regain its footing in the semiconductor industry. However, turning these tests into long-term contracts will be the real measure of success.
