Intel’s 18A Gamble: Possible Resurgence of the Foundry Wars for Semiconductors

An essential step for Intel’s faltering foundry business is the active testing of the company’s sophisticated 18A semiconductor manufacturing process by Nvidia Corp. and Broadcom Inc. If these tests are successful, Intel’s position in the contract chipmaking market might be cemented, and high-value manufacturing contracts worth hundreds of millions of dollars could result.

Intel’s 18A Process:

The 18A process, which directly competes with the state-of-the-art nodes of Taiwan Semiconductor Manufacturing Co. (TSMC), is Intel’s most sophisticated semiconductor manufacturing technology. These preliminary experiments are not, however, large-scale chip manufacturing operations. Instead of committing to large-scale manufacturing, Nvidia and Broadcom are testing test wafers to gauge Intel’s capabilities.

A representative for Intel said, “We don’t comment on specific customers but continue to see strong interest and engagement on Intel 18A across our ecosystem,” despite the company’s failure to formally provide specifics.

Intel’s 18A process is also being assessed by Advanced Micro Devices (AMD). It’s unclear whether AMD has sent test chips for evaluation. Industry observers speculated about AMD’s possible interest in Intel’s foundry services after the company failed to respond when contacted for more information.

Intel’s Manufacturing Obstacles and Delays:

The 18A technology has generated hope, but Intel’s manufacturing schedule has encountered obstacles. Due to delays in certifying crucial intellectual property (IP) required by smaller and mid-sized chip designers, Intel has pushed back the schedule by six months from its original 2026 target for contract manufacturing clients. Many potential clients won’t be able to go on with chip manufacture until at least mid-2026 without verified intellectual property.

Although it admitted to the delay, Intel reiterated its intention to increase manufacturing in the second half of 2025. The business expects to receive client designs later this year and would “begin ramping production in the second half of this year, delivering on the commitments we have made to our customers.”

As U.S. authorities want to boost domestic semiconductor production and lessen dependency on foreign foundries like TSMC and Samsung, Intel’s contract manufacturing operation is a crucial component of its recovery plan. However, Intel’s foundry division has had financial difficulties. The company’s sales fell by 60% in 2023, and it is not anticipated to break even until at least 2027.

By 2025, analysts predict that Intel’s foundry division will bring in $16.47 billion. However, most of this money would likely come from internal chip manufacturing rather than sales to outside clients. One of the biggest obstacles to Intel’s long-term foundry goals is the absence of substantial third-party clients.

According to industry sources, Nvidia and Broadcom’s assessments may provide Intel’s foundry division a much-needed lift. Several chipmakers are carefully monitoring these experiments before choosing to use Intel’s 18A process for their semiconductor production.

Many customers—I’m referring to Foundry customers—are waiting to observe Intel’s current status. Will I commit? Will I not? Stated Sassine Ghazi, CEO of Synopsys, a business that supplies Intel’s foundry operations with essential intellectual property.

Unexpectedly, it has been claimed that U.S. government representatives have been in talks with C.C. Wei, the CEO of TSMC, about a possible joint venture with Intel’s foundry division. The discussions indicated a change in strategy to strengthen Intel’s competitive position, which also looked at the potential of other chipmakers purchasing equity holdings in the new business.

Intel’s foundry aspirations are under increasing scrutiny because of delays in its $28 billion Ohio chip factories and problems in its European expansions. In the upcoming months, it may be determined if Intel can draw in significant external clients or continue to rely mostly on in-house chip manufacturing. In contrast, Nvidia, Broadcom, and AMD continue their assessments.