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Intel’s foundry ambitions under scrutiny as Nvidia declines 18A process

by VARINDIA 2025-12-27

Intel’s efforts to re-establish itself as a major force in advanced semiconductor manufacturing have come under renewed scrutiny after Nvidia decided not to move forward with Intel’s 18A chipmaking process. The development has raised concerns among investors about Intel’s ability to attract large, high-profile customers to its growing foundry business.

Shares of Intel slipped following reports that Nvidia had paused testing of Intel’s manufacturing technology, dampening sentiment around a business segment that is central to the company’s long-term turnaround strategy.

Nvidia Halts Testing of Intel’s 18A Process

According to a report citing people familiar with the matter, Nvidia recently evaluated Intel’s 18A production process, one of the most advanced technologies in Intel’s manufacturing roadmap. While the chip designer conducted initial testing, it ultimately chose not to proceed further with the process. The reasons behind the decision were not disclosed.

For Intel, interest from Nvidia had been viewed as an important signal of progress, given Nvidia’s position as one of the world’s leading designers of high-performance chips. As a result, the decision to halt testing has been interpreted as a potential setback, even though such evaluations are common and do not always lead to commercial agreements.

High Stakes for Intel’s Foundry Ambitions

The 18A process is a cornerstone of Intel’s plan to revive its manufacturing leadership and expand its role as a contract chipmaker for external customers. Intel has repeatedly highlighted the technology’s expected improvements in performance, power efficiency, and chip density, positioning it as competitive with the most advanced processes in the industry.

However, winning over major customers is critical to scaling the foundry business. Without large-volume clients, Intel could face challenges justifying the massive investments required to operate and expand advanced manufacturing facilities.

Investor Concerns and Competitive Pressures

From an investor perspective, the report has intensified scrutiny of Intel’s execution risks. The global semiconductor manufacturing landscape is highly competitive, and customers such as Nvidia rely on extremely reliable and proven processes to meet demand for data centre, artificial intelligence, and high-performance computing chips.

For Nvidia, pausing the evaluation does not necessarily indicate a broader shift in manufacturing strategy. Chip designers routinely test multiple technologies, and not all trials result in long-term commitments. Still, the episode highlights the stringent standards applied when selecting manufacturing partners.

Intel has previously noted that customer testing cycles can be lengthy and iterative, influenced by technical readiness, timing, and broader strategic considerations. While the company continues to invest heavily in its foundry operations, developments involving industry leaders like Nvidia tend to carry significant weight.

As Intel pushes ahead with its transformation, markets will be watching closely for signs that its advanced manufacturing investments are translating into firm customer deals.