Reports that Nvidia has suspended testing of Intel’s next-generation 18A manufacturing process have cast a shadow over the chipmaker’s strategic pivot. The development introduces uncertainty around the technical readiness of Intel’s foundry operations, a cornerstone of its ambitious turnaround plan.
Market Reaction Highlights Strategic Stakes
The news prompted an immediate sell-off, with Intel’s shares falling between 2.7% and 3.6% in pre-market trading. The stock currently trades at €30.83, notably below its 52-week high of €37.52, despite maintaining a significant gain over a twelve-month horizon. This market response underscores how central the success of the foundry business is perceived to be for Intel’s broader recovery. Investors had largely priced in a corporate turnaround in recent months, making any potential setback for the flagship 18A process a direct challenge to the narrative driving the stock’s recent appreciation.
The Nvidia Halt and Its Implications
According to recent industry reports, Nvidia has temporarily halted its evaluation of Intel’s advanced 18A fabrication node. The graphics chip leader had been assessing the technology for its own high-performance semiconductors. While Intel maintains that its 18A technologies are “progressing well,” the market interprets the testing pause as a negative signal. Many participants view it as an indication that Intel’s foundry capabilities may not yet have reached the expected level of maturity for demanding clients like Nvidia.
The situation is particularly sensitive given recent history. In September, the two companies announced a comprehensive partnership, which included a planned $5 billion investment by Nvidia in Intel stock. Nvidia’s decision to put technical assessments on hold now raises immediate questions about the partnership’s actual progress and the competitiveness of Intel’s 18A node against industry leader TSMC.
18A: The Core of Intel’s IDM 2.0 Strategy
The 18A process is the centerpiece of Intel’s “IDM 2.0” strategy. This technology node is intended to help the company reclaim process leadership and establish itself as a contract manufacturer for top-tier clients such as Nvidia and Broadcom. Consequently, any news of a key reference customer pausing or canceling tests directly clouds these ambitions.
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The context is further charged by political considerations. The U.S. government recently finalized a support package that includes taking an approximate 10% stake in Intel to bolster domestic chip production. This model, however, depends on Intel successfully attracting enough external customers for its advanced nodes. Should technical reservations among major clients lead to delayed or reduced orders, the timeline for the foundry business to generate meaningful revenue could be pushed back.
Key Points at a Glance:
- Trigger: Nvidia suspends testing of the 18A manufacturing process.
- Market Perception: Viewed as a signal of uncertainty regarding the technical maturity of Intel’s foundry offering.
- Company Stance: Intel emphasizes its technology roadmap remains on schedule.
- Strategic Context: 18A is a critical factor for the IDM 2.0 strategy and the foundry turnaround.
Path Forward: Clarity with Partners is Essential
In the near term, focus will shift to whether Intel can address the technical points identified during testing and re-engage Nvidia for further 18A collaboration. Management continues to assert that the manufacturing schedule is on track, yet the market reaction demonstrates the exceptionally high expectations surrounding the 18A rollout.
The coming months will be decisive. Intel must demonstrate concrete progress in its foundry segment, potentially through confirmed production orders or a revival of the Nvidia collaboration. The extent to which the foundry expansion becomes a sustainable revenue pillar, as planned, or faces a noticeable delay in its profit contribution hinges on this proof of execution.
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