Nvidia has reportedly paused its qualification testing of Intel's advanced 18A semiconductor manufacturing process, dealing a significant blow to Intel's ambitions to revive its foundry business and compete with Taiwan Semiconductor Manufacturing Company (TSMC). The news, reported by Reuters, caused Intel's stock (INTC) to plunge by 2.5% on Wednesday, while Nvidia's stock (NVDA) also saw a nearly 1% decline.
The 18A process is Intel's most advanced production node and a cornerstone of its strategy to restore U.S. leadership in chipmaking. It promises substantial improvements, including 30% higher transistor density, 25% faster performance at the same voltage, and up to 36% lower power consumption. However, both Nvidia and Broadcom, which had been evaluating the node for months, have stalled testing as performance and yield targets fell short of expectations. Broadcom had reportedly told Intel in September that 18A was "not currently viable for high-volume production."
This pause is a critical setback for Intel, which is in its second consecutive year of losses and is not expected to return to profitability before 2027. The company has already pushed back the 18A timeline twice, first to 2026 and then to mid-2026. Despite Intel's spokesperson stating the technology is "progressing well" and the recent opening of its Fab 52 facility in Arizona—the first factory to use 18A—the hesitation from a key potential customer like Nvidia is seen as a vote of no confidence.
For Nvidia, the world's most valuable chip company and a dominant force in AI accelerators, the move underscores its reliance on TSMC's proven and scalable manufacturing capacity. Nvidia operates on tight timelines, and sticking with TSMC, which controls nearly three-quarters of the market and is shipping 3nm chips at a 90% yield rate, is the safer strategic play. This reality was highlighted in September 2025 when Nvidia announced a $5 billion investment in Intel but carefully avoided any manufacturing commitments, with CEO Jensen Huang explicitly stating the company would continue relying on TSMC.
The development solidifies TSMC's near-total dominance in advanced chip manufacturing for the AI era, with analysts like Angelo Zino from CFRA warning that Intel's foundry business will "continue to bleed cash at least through 2027."
