Intel Corporation (INTC.US) may be on the verge of overcoming the challenges in chip manufacturing. It is rumored that NVIDIA Corporation and Broadcom Inc. are testing chips using an 18A process.

Two informed sources revealed that chip design companies NVIDIA Corporation (NVDA.US) and Broadcom Inc. (AVGO.US) are currently conducting manufacturing tests using Intel Corporation's (INTC.US) technology, showing preliminary confidence in Intel Corporation's advanced production technology which is facing challenges. These previously unreported tests suggest that these companies are gradually nearing a decision on whether to award Intel Corporation a manufacturing contract worth hundreds of millions of dollars. If such a decision is made, Intel Corporation's contract manufacturing business would receive an unexpected windfall and industry recognition. Intel Corporation's contract manufacturing business has been plagued by delays and has not yet announced any well-known chip design customers. In addition, AMD (AMD.US) is also evaluating whether Intel Corporation's 18A manufacturing technology meets its needs, but it is currently unclear whether they have sent test chips to Intel Corporation's factories. AMD declined to comment. A spokesperson for Intel Corporation stated: "We do not comment on specific customers, but we continue to see strong interest and active engagement across the ecosystem for Intel Corporation's 18A technology." The tests conducted by NVIDIA Corporation and Broadcom Inc. are using Intel Corporation's 18A technology, a series of technologies developed by Intel Corporation over the years that can manufacture advanced artificial intelligence processors and other complex chips. The 18A technology competes with similar technologies from Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), which dominates the global chip market. NVIDIA Corporation declined to comment, while Broadcom Inc. did not respond to requests for comment. These tests are not focused on complete chip designs, but are aimed at evaluating the performance and capabilities of Intel Corporation's 18A technology. Chip designers sometimes purchase wafers to test specific components of the chips in order to address any potential issues or defects before full-scale production of the design. The tests are ongoing and may last for several months, and it is currently unknown when they began. However, manufacturing tests do not guarantee that Intel Corporation will ultimately win new business. Last year, reports from external media indicated that a batch of test results from Broadcom Inc. left its executives and engineers disappointed. At the time, Broadcom Inc. stated that they would continue to evaluate Intel Corporation's foundry business. Two other sources and documents seen by Reuters show that while Intel Corporation is conducting these early tests, the delivery time of chips from Intel Corporation may be further delayed for some contract manufacturing clients who rely on third-party intellectual property. The success of Intel Corporation's contract manufacturing business was a core part of former CEO Pat Gelsinger's plan to revive the once-glorious American technology company. However, in December last year, the board dismissed Gelsinger. Intel Corporation's interim co-CEOs have put on hold plans to release an upcoming AI chip, delaying Intel Corporation's hope for a viable proprietary AI chip until at least 2027. The struggling business of Intel Corporation has attracted the attention of the Donald Trump administration, which is keen on restoring American manufacturing strength and competing with China. Intel Corporation is seen as the United States' only hope for producing the most advanced semiconductors domestically. An informed source revealed that earlier this year, US government officials met with the CEO of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR in New York to discuss the possibility of a joint venture acquiring a majority stake in Intel Corporation's factory division. The discussions also involved the possibility of other chip design companies purchasing shares of this new joint venture. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR declined to comment, and Intel Corporation did not respond to questions about these meetings. Intel Corporation has stated that they have signed agreements with Microsoft Corporation (MSFT.US) and Amazon.com, Inc. (AMZN.US) to use the 18A technology to produce chips, but details are scarce. Intel Corporation has not revealed which chips Microsoft Corporation plans to produce at Intel Corporation's factories, nor has it specified Amazon.com, Inc.'s plans.Specific product. It is currently unclear what the manufacturing scale involved in these two agreements is.setback For potential contract manufacturing customers, the production start time for the 18A process had originally been delayed until 2026. Now, according to supplier documents reviewed by Reuters and information from two insiders, Intel Corporation has delayed the schedule by another 6 months. The reason for the delay is that the time required for key intellectual property certification for the 18A process is longer than expected. Two insiders and related documents indicate that without certified foundational intellectual property on which small and medium chip designers rely, a large number of potential customers will not be able to use the 18A process to manufacture chips until at least mid-2026. It is currently unclear why the intellectual property certification has been delayed. Intellectual property certification involves suppliers guaranteeing that their technology can operate on a specific manufacturing process. When asked about this delay, Intel Corporation stated, "We will gradually increase production in the second half of this year to fulfill our commitments to customers." The company also added that it expects to receive design plans from customers this year. Industry experts state that many chip designers are closely monitoring Intel Corporation's contract manufacturing business progress, hoping to use its manufacturing services as soon as possible. Synopsys, Inc. CEO Sassine Ghazi stated in an interview after the company's financial report that the performance of Intel Corporation's 18A process currently falls between Taiwan Semiconductor Manufacturing Co., Ltd.'s most advanced process and its previous generation process. Synopsys, Inc. provides some key intellectual property for Intel Corporation's contract manufacturing business. "Now, many contract customers are watching to see how Intel Corporation's situation unfolds. They are hesitant whether to place orders," Ghazi said. The delay in mass production of customer chips could cause growth in revenue for Intel Corporation's contract manufacturing business to stagnate. Currently, Intel Corporation's contract manufacturing business mainly produces its own chips. It is expected that by 2025, revenue for Intel Corporation's contract manufacturing business will reach $16.47 billion, almost all of which comes from Intel Corporation itself. Revenue for Intel Corporation's contract manufacturing business division declined by 60% last year, and the company stated that it will not achieve breakeven until at least 2027.