Deal between Intel and Nvidia may bolster Intel's future chip production technology
In a significant move that could shake up the tech industry, Nvidia has invested $5 billion in Intel, securing a 4% stake. This partnership aims to connect Intel's central processors with Nvidia's AI and graphics chips using NVLink technology.
The joint products, still in the early stages of development, are likely to be manufactured on future manufacturing lines. Intel Foundry will supply central processors for these products, while Nvidia's technology will be turned into a physical chip by engineers from both companies.
This collaboration could potentially extend to Intel's manufacturing arm in the future, according to analysts. If successful, the partnership could provide Intel with the production volumes needed to make its manufacturing investments viable. This could indirectly boost Intel's 14A manufacturing process slated for 2027.
For Nvidia, this partnership offers better access to a large number of business and government customers with software written for Intel's chips. This could give Nvidia an advantage over its rivals, with the primary loser in this partnership being AMD, which competes with both Nvidia and Intel in their respective markets.
Analysts believe that this partnership could potentially help Intel secure enough customer commitments to pursue the 14A manufacturing process. Intel has warned it may not be able to proceed with the 14A manufacturing process without enough customer commitments. If the joint products are popular, they could help Intel secure these commitments and move forward with the 14A manufacturing process.
However, the implications of this partnership for AMD are not all negative. Analyst Jack Gold, the chief analyst at J. Gold Associates, noted that while the Intel and Nvidia collaboration does not explicitly mention foundry services, it could be a potential future extension of the partnership. On the other hand, Ben Bajarin, CEO of Creative Strategies, expressed confidence that the 14A manufacturing process will continue if the partnership is successful.
Meanwhile, industry analysts have expressed concerns about the impact of this partnership on AMD. Gold stated that having two major competitors combine their efforts is not beneficial for AMD. Another analyst, whose comments were made in paragraph 9, expressed similar sentiments about the partnership not being advantageous for AMD.
In conclusion, the Nvidia-Intel partnership could give Intel an edge over its rivals, potentially boosting its manufacturing prospects and securing better returns on its 14A manufacturing investments. However, the implications for AMD remain uncertain, with analysts expressing concerns about the partnership's potential impact on the company.
