Intel is making progress with its foundry plans. On Wednesday morning, its shares rose 2.1%, bouncing back from part of an 8.5% drop the day before. This came after Intel said it has started risk production for the 18A-P version of its 18A chip process. This step lets Intel begin trial production runs as it tries to win over big outside customers for its chip-making business. Here’s what the 18A-P news means and why Apple could be the key customer that decides if Intel’s foundry strategy succeeds.
Intel disclosed the 18A-P update late Tuesday at the VLSI Symposium. The new process variant can produce chips that run 9% faster at the same power consumption, or reduce power use by 18% while maintaining the same speed, compared with the standard 18A process. The improvements are designed to make Intel’s foundry more competitive as it works to close the gap with Taiwan Semiconductor Manufacturing, which remains the dominant contract chip manufacturer globally.
Intel’s foundry business is still losing money each quarter, so the company needs big outside customers to turn things around. Nvidia’s $5 billion investment led many to expect a major manufacturing deal, but nothing official has been announced. Apple is another major potential customer. Last month, Bloomberg said Apple is talking with Intel about making chips for future devices. At the time, both Intel and Apple declined to comment.
Analysts at Counterpoint Research think Apple will likely use the 18A-P process for its next M7 processor, which is used in Mac and iPad devices. They say that if Apple’s test goes well, it could be a turning point for Intel’s foundry plans. However, the analysts warn that yield, the percentage of working chips made, is just as important as the technical details. The real challenge will be matching the consistent quality that TSMC provides for Apple.
