Intel Corporation (NASDAQ: INTC) shares declined roughly 2% in early Wednesday trading following reports that Nvidia (NASDAQ: NVDA) decided not to adopt Intel’s 18A chip manufacturing process. The move comes after both companies conducted earlier evaluations of the advanced fabrication technology.
According to reports, Nvidia tested Intel’s 18A process earlier this year but ultimately chose not to proceed with production. Broadcom (NASDAQ: AVGO) was also involved in similar trials, signaling broader industry interest—but hesitation—in Intel’s next-generation manufacturing capabilities.
Intel’s Foundry Ambitions Face Early Hurdles
The 18A process is a cornerstone of Intel’s strategy to grow its foundry business and attract external customers. By offering cutting-edge manufacturing technology, Intel aims to compete more directly with Taiwan Semiconductor Manufacturing Company (TSMC), which currently dominates advanced chip production.
However, early technical challenges associated with the 18A node appear to be slowing customer adoption. Winning major clients like Nvidia is critical for Intel as it works to scale production, validate performance, and build confidence in its manufacturing roadmap.
Nvidia Sticks With TSMC for Advanced Chips
Despite the decision, Nvidia shares remained largely unchanged, indicating little immediate concern among investors. Nvidia continues to rely heavily on TSMC for producing its high-performance GPUs and AI accelerators, maintaining stability in its supply chain.
The decision suggests Nvidia sees limited short-term advantage in shifting production away from its established manufacturing partners.
What This Means for Intel Investors
For Intel, Nvidia’s decision underscores the competitive pressure it faces in the global semiconductor foundry market. While Intel continues to invest heavily in advanced manufacturing, converting trials into long-term customer commitments remains a key challenge.
