FILE PHOTO: A smartphone with a displayed Intel logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File PhotoIntel's contract manufacturing business has suffered a setback after tests with chipmaker Broadcom failed, three sources familiar with the matter told Reuters, dealing a blow to the company's turnaround efforts.
"Intel 18A is powered on, healthy and yielding well, and we remain fully on track to begin high volume manufacturing next year," an Intel spokesperson said in a statement."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."
Broadcom is not a household name but makes crucial networking gear and radio chips that helped generate $28 billion in overall chip sales in its last fiscal year. It has benefited from the boom in spending on artificial intelligence hardware, and J.P. Morgan analyst Harlan Sur estimated it will bank $11 billion to $12 billion from AI this year, up from $4 billion last year.
Intel reported a $7 billion operating loss for the foundry business, wider than the $5.2 billion in losses the year earlier. Executives expect the contract chip business to achieve breakeven in 2027. For an advanced manufacturing process used by TSMC, the Taiwanese giant charges roughly $23,000 per wafer at high volume, according to two sources familiar with wafer pricing. Reuters could not determine Intel's wafer pricing.Moving a chip design from a manufacturing process used by a company such as TSMC to another vendor such as Samsung or Intel can take months and requires dozens of engineers, depending on the complexity of the chip and the differences in manufacturing technology.