Intel Surges 6% Premarket as Nvidia, Broadcom Test 18A Chips

Intel's stock surged 6% in premarket trading, reaching approximately $25 per share and reclaiming a $100 billion market cap, after reports that Nvidia and Broadcom are conducting chip manufacturing tests with the company.

Two sources familiar with the matter told Reuters that chip designers Nvidia and Broadcom are testing Intel's advanced 18A manufacturing process. If the results are satisfactory, both companies could sign manufacturing contracts worth hundreds of millions of dollars, significantly boosting Intel's revenue.

Intel's 18A Process Competing with TSMC

The 18A process, which has been in development for years, enables the production of advanced AI processors and other high-performance chips. This technology places Intel's capabilities between TSMC's latest process and its previous generation, positioning it as a direct competitor to the Taiwanese semiconductor giant, which dominates the global chip manufacturing market.

Testing remains ongoing and could last several months, though the exact start date is unclear. Unlike full chip design validation, these tests focus on evaluating the performance and capabilities of Intel's 18A process. Chip designers often purchase wafers to test specific components before committing to mass production.

Testing Uncertainty

It's important to note that successful testing is not guaranteed. In 2023, Reuters reported that a batch of Broadcom's initial tests failed to meet expectations, disappointing the company's executives and engineers. However, Broadcom stated at the time that it remained in discussions with Intel's foundry.

Intel's Strategic Edge Amid U.S. Manufacturing Push

While Intel has fallen behind in the GPU era, recent developments provide a glimmer of hope. Former U.S. President Donald Trump has emphasized reshoring American manufacturing and competing with China, positioning Intel as the country's key semiconductor player.

Intel has already signed agreements with Microsoft and Amazon to use the 18A process for chip production, though specific details remain undisclosed. Meanwhile, both Broadcom and TSMC have shown interest in splitting Intel's design and manufacturing divisions, but negotiations remain in early stages.