Nvidia (NVDA) and Broadcom (AVGO) are reportedly running manufacturing tests with Intel (INTC), sending shares in the chip manufacturing company higher in premarket trading on Monday. According to Reuters, the two chip designers are running the tests to determine whether to hand manufacturing contracts to Intel, which could deliver a significant boost to the firm’s contract chip making business.
“We don’t comment on specific customers but continue to see strong interest and engagement on Intel 18A across our ecosystem,” a spokesman for Intel told the news provider.
The 18A process is used for making advanced artificial intelligence processors and is considered similar to technology used by Taiwan Semiconductor Manufacturing Co (TSM), the world’s largest contract chip maker. Its seen as a key plank for turning INTC’s fortunes around and has gained increasing attention as the White House aims tariffs at rivals like TSM in to boost U.S. chip manufacturing. However, the 18A process has faced delays and interim chiefs at INTC have pushed it back further.
While the tests could deliver a windfall to Intel, last year Reuters reported AVGO ran tests with the company in the past but these disappointed executives. Advanced Micro Devices (AMD) is also thought to be considering whether the 18A process will be suitable for its needs.
INTC Key to U.S. Chips
Intel has gained a lot of attention recently after President Donald Trump repeatedly accused Taiwan of stealing the U.S. semiconductor industry. He recently told House Republicans the White House would impose tariffs of 25%, 50%, or even 100% on chip imports to incentivize U.S. semiconductor manufacturing. INTC is seen as the main hope for spurring domestic chipmaking.
Meanwhile, according to reports, rivals TSM and AVGO are exploring possible deals that would break INTC in two, after Intel’s recent troubles made it an acquisition target. Apparently, Trump administration officials met with C.C. Wei, CEO of TSMC, about the Taiwanese firm taking a majority stake in Intel’s factory unit.
However, a White House official told Reuters that the Trump administration would be “unlikely” to back a foreign company running Intel’s factories.
Separately it is understood Broadcom has been looking at Intel’s chip-design and marketing business.
INTC Puts Chips on Table with Contract Business
Former CEO Pat Gelsinger made the foundry business of contract chip manufacturing the cornerstone of his turnaround strategy, but he was fired in December. Last year the company said it would further separate its chip-manufacturing and design operations, a move seen as potentially leading to a breakup that would see the American tech icon fall into line with global trends that has seen companies tend to focus on either designing or making chips, but not both.
But Gelsinger stopped short of breaking up the company, saying it was better off as one. “We’re better together as well as increasingly distinct to meet those other opportunities and requirements,” he said last September.
It’s understood Frank Yeary, the interim executive chairman of Intel, has since put plans for an AI chip on ice and led discussions with possible suitors and officials from the Trump team, which could eventually see INTC broken up.
Is NVDA a Good Stock to Buy?
On Wall Street, analysts have a Strong Buy consensus rating on NVDA stock, based on 38 Buys and three Holds. The average NVDA price target of $178.66 implies about 43% upside to the current level after the stock dipped into correction territory this year.
