Intel Begins 18A P Semiconductor Process Manufacturing for Major Foundry Partners While Securing Massive Government and Nvidia Investment for Market Growth
Intel has begun preliminary manufacturing for their advanced 18A P semiconductor process, which the foundry announced at the VLSI Symposium in Honolulu. The advancement will lead Intel one step closer to signing major third party manufacturing contracts including the possibility of fabricating chips for future Apple devices. Naga Chandrasekaran, who heads Intel Foundry, expressed that the announcement signals a firm commitment to partners regarding future process development.
The 18A P is a key development in the comeback strategy of the chip maker as it tries to compete in the contract manufacturing sector. It has shown 9% higher performance and 18% better power consumption than the 18A which has been in high volume production in Arizona. In addition, the improved design offers 20% higher thermal resistance and is compatible with current 18A process setups.
Stockholders are reacting positively to these advancements in manufacturing. Intel has gained over 200% since the start of the year and is building on an 84% gain a year prior to this. The rise in value is bolstered by a 10% equity stake acquired by the United States Government and a $5 billion investment from Nvidia. CEO of Intel Lip Bu Tan told CNBC that he expects significant commitments from several top Foundry clients by the end of the year.
Shares jumped almost 14% in early 2024 due to preliminary rumors of a manufacturing contract between Apple and Intel. While many analysts say Apple will wait to use the improved 18A P, the competitive environment still poses issues. "Intel's focus has been x86, while all custom Silicon like Apple, Google, and Amazon utilize competing Arm instructions," says Neil Shah, an analyst for Counterpoint Research. It is an unproven capability for Intel, unlike TSMC who dominates Arm chip fabrication currently.
To overcome the limitations of architecture, Intel plans to attract partners through its advanced packaging capabilities. TSMC is broadening its reach through a 165 billion dollar campus just 50 miles away from Intel Arizona facilities and while it is currently the market leader, its CoWoS packaging has a significant backlog. This is where Intel's own embedded multi die interconnect bridge (EMIB) technology comes into play and directly competes with TSMC's solution as it presents a simple entryway to the market.
