Intel's 18A process commercialization faces a cold reception, while NVIDIA shifts focus to TSMC N2 to strengthen the AI chip supply chain

Market rumors indicate that NVIDIA has made a significant adjustment in its choice of process technology for the next-generation AI chips. Sources reveal that this global leading accelerator chip designer has suspended plans to mass-produce using the 18A process and is instead fully relying on TSMC’s N2 process as its main manufacturing technology. This move has immediately caused a stir in the industry, as it directly impacts Intel’s foundry services(IFS)'s commercial prospects.

Why is TSMC N2 the preferred choice?

NVIDIA’s strategic shift reflects a strict requirement for process maturity and supply stability. In comparison, the N2 process has been validated across multiple generations of products, offering more reliable yield expectations for large-scale AI chip production. In the increasingly fierce competition for computing power, any fluctuations in process yield could become a critical weakness in market competition.

Industry insiders point out that NVIDIA’s decision does not constitute a complete rejection of Intel. The previous $5 billion strategic investment was aimed at building long-term manufacturing capacity insurance for “domestic manufacturing in the U.S.” Pausing 18A does not mean breaking ties but is a cautious “technology verification period” to observe whether Intel’s own product lines (such as the Panther Lake series) can deliver convincing yield results next year.

The market challenge facing Intel

As a key part of Intel’s “Four years, five nodes” grand vision, the 18A process was originally expected to attract top-tier tech clients. Now, losing NVIDIA, the most symbolic flagship, Intel’s IFS team will have to turn to specific application vendors like Microsoft and Amazon to fill the capacity utilization gap. This is undoubtedly a heavy blow to Intel’s initial commercial performance.

Analysts generally believe that the technological dialogue between NVIDIA and Intel is far from over. As process technology continues to evolve, the next-generation 14A process could become the next point of intersection. NVIDIA has long adhered to a “multi-source supply” strategic layout, but the prerequisite is that alternative suppliers must have competitiveness in (PPA) and process reliability to rival TSMC’s N2.

14A process: a turning point imminent

Industry attention has shifted to Intel’s 14A process development progress. If Intel cannot demonstrate performance per watt superior to competitors before 2026 using 14A, NVIDIA’s current “suspension” decision may evolve into a permanent termination of the technology selection. This would be a lost opportunity that could be difficult for Intel to recover in reshaping its wafer foundry competitiveness.

The competition in process technology fundamentally boils down to reliability and performance. In an era of exploding AI computing demands, core customers like NVIDIA will not sacrifice product competitiveness for strategic investments. The choice of TSMC N2 reflects this chip designer’s clear understanding of industry realities.