Intel’s contract manufacturing business has failed tests with chipmaker Broadcom in a blow to the company’s turnaround efforts.
The tests conducted involved sending silicon wafers — the foot-wide discs on which chips are printed — through Intel‘s most advanced manufacturing process known as 18A, according to sources, with Broadcom receiving the wafers from Intel last month.
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Once the results had been studied by engineers and executives the company concluded that the manufacturing process is not yet viable to move to high-volume production.
A spokesperson for Broadcom said the company is “evaluating the product and service offerings of Intel Foundry and have not concluded that evaluation.”
As part of a disastrous second-quarter earnings report that resulted in a loss of more than a quarter from the company’s market value, Intel cut its workforce by 15%, and reduced its capital spending related to factory construction.
A statement from Intel reads: “Intel 18A is powered on, healthy and yielding well, and we remain fully on track to begin high volume manufacturing next year.
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By GlobalData“There is a great deal of interest in Intel 18A across the industry but, as a matter of policy, we do not comment on specific customer conversations.”
Intel reported a $7bn operating loss for the foundry business, wider than the $5.2bn in losses the previous year.
Executives expect the contract chip business to achieve break-even in 2027.
Intel released its manufacturing tool kit for its 18A process to other chipmakers over the summer, with the company planning to be manufacturing-ready by the end of 2024 for its own chips.
The company also expects to begin high-volume production for external customers in 2025.
Intel has committed to around $100bn of expansion and new factory construction at several sites in the US with a critical part of the company’s expansion being to attract big customers such as NVIDIA or Apple.
