Intel’s Foundry Ambitions Face Market Scrutiny

Intel's strategic pivot to become a major semiconductor foundry is encountering renewed skepticism from investors. The latest concerns were triggered by reports that a key potential partner has paused its evaluation of Intel's next-generation manufacturing technology, casting fresh doubt on the company's ambitious turnaround plan. While share prices experienced notable volatility, they managed to recover from deeper losses by the session's close.

Trading activity reflected the market's immediate reaction to the emerging reports. On Wednesday, December 24th, Intel's stock exhibited significant intraday swings.

• During the session, the share price declined by approximately 3.9%, hitting a low of $34.95.
• A subsequent wave of buying interest helped recoup much of the earlier decline.
• Shares ultimately closed at $36.16, representing a more modest daily loss of 0.56%.

This price action suggests that while the initial negative sentiment was partially absorbed, larger institutional investors remain cautious. The long-term revenue potential of Intel's foundry division is now a central focus for market valuation.

Nvidia Pauses Evaluation of 18A Process

The source of the uncertainty stems from industry reports indicating that Nvidia has temporarily suspended its testing of Intel's advanced 18A manufacturing node. This cutting-edge process technology is a cornerstone of Intel's "IDM 2.0" strategy, which aims to establish the company as a direct competitor to TSMC in the contract chipmaking business.

According to the reports, Nvidia halted its assessment following initial trial runs. Intel has countered this narrative, stating that development of the 18A technology is progressing on schedule and meeting internal milestones. Nevertheless, for the investment community, the decision by the leading AI chip designer is being interpreted as a potential red flag, hinting at possible technical challenges or yield issues.

Should investors sell immediately? Or is it worth buying Intel?

Key reported details include:

• Nvidia's pause of its 18A process evaluation after preliminary testing.
• Intel's insistence on planned progress and achieved internal goals.
• The market's perception of Nvidia's move as a setback for Intel's foundry narrative.

The central tension revolves around Intel's ability to secure long-term, high-volume manufacturing contracts with major external clients like Nvidia—precisely where market skepticism is currently concentrated.

Foundry Strategy Under the Microscope

The testing pause directly challenges the narrative of Intel's capability to attract significant external foundry customers. Commitments from large "fabless" semiconductor companies, such as Nvidia, are viewed as a critical benchmark for the success of its new business model.

Market analysts emphasize that technical validation by industry leaders is essential to securing long-term manufacturing agreements. The current interruption in the 18A evaluation implies that the timeline for high-volume production for external clients may face adjustments.

Consequently, the market is adopting a wait-and-see approach, demanding concrete evidence that the 18A node can deliver the required performance and yield for premium customers. The most decisive signals for investors will likely come from future client announcements and clear, demonstrable progress on Intel's foundry roadmap.