Intel (INTC, Financials) shares rose about 5.7% in premarket trading on Monday after reports that Nvidia (NVDA, Financials) and Broadcom (AVGO, Financials) are evaluating the company's 18A manufacturing process, potentially setting the stage for high-value contracts, Reuters reported.
To ascertain Intel's fit for advanced chip manufacture, the two semiconductor companies are evaluating its technique. A positive result might result in big contracts valued in hundreds of millions of dollars, therefore helping Intel's contract manufacturing operationswhich has experienced delaysby means of cash boost.
Advanced Micro Devices (AMD, Financials) is evaluating Intel's 18A technology as well but has not verified if it has shipped test chips.
Intel's 18A manufacturing technique positions it as a possible rival to Taiwan Semiconductor Manufacturing (TSM, Financials) as it is meant for powerful artificial intelligence processors and other sophisticated devices. Broadcom and Nvidia's assessment focuses on certain facets of Intel's process rather than on whole chip designs. It is yet unknown when the testing period will start.
Broadcom's previous Intel testing last year apparently fell short of expectations, which begs questions about Intel's production capacity. But Intel signed a contract to build a bespoke artificial intelligence chip for Amazon (AMZN, Financials), indicating more general interest in its contract manufacturing operations in September 2024.
Following announcements that TSM and Broadcom were contemplating purchasing some of the business, Intel's shares rose in February. Earlier this year, U.S. authorities also spoke with TSM's CEO to explore a possible majority ownership in Intel's manufacturing business, with other chip designers maybe having equity interests.
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