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Nvidia recently halted a test run of Intel’s 18A manufacturing process, a development that has alarmed investors and driven Intel’s stock lower. The 18A process is a critical part of Intel’s turnaround strategy, as it is designed to make chip production more efficient and competitive with global leaders like TSMC. The pause in testing raises concerns about Intel’s ability to deliver on its promises and regain its position in the semiconductor industry.
Intel is currently working hard to rebuild trust with investors and customers. The U.S. government has shown confidence in Intel by taking a 10% stake in the company, and Nvidia had previously pledged around $5 billion to Intel in September. Although Nvidia is not a direct customer—preferring to work with TSMC—their willingness to test Intel’s 18A process was seen as a significant endorsement of Intel’s foundry business.
The market reacted strongly to the news, with Intel’s stock dropping about 3% in pre-market trading. This reaction is notable because there was no formal contract between Nvidia and Intel; rather, the market is responding to broader concerns about Intel’s ability to attract major customers and execute its turnaround plan. Investors are closely watching for signs that Intel can compete effectively in a challenging global environment.
The 18A process was unveiled with much fanfare at a major event in October, where Intel positioned it as a key technology for both its foundry business and its own upcoming laptop products. The success of this process is seen as vital for Intel’s future, as it is expected to help fund further technological advancements and support new product launches. Any setbacks in the adoption or validation of the 18A process could have significant implications for Intel’s growth prospects.
Overall, there is a lot riding on Intel’s ability to secure demand for its new manufacturing process and attract marquee customers like Nvidia. Investors are looking for evidence that Intel can deliver on its promises, especially in the context of increased U.S. government support for domestic chip manufacturing. The outcome of these efforts will be crucial for Intel’s reputation, competitiveness, and long-term success in the semiconductor industry.