Intel CEO Lip-Bu Tan will try to woo AI chip giants NVIDIA and Broadcom as part of his bid to turn the struggling firm around. Lip-Bu took the helm over at Intel earlier this month and has since then laid down his plans to revitalize the struggling firm. Customer satisfaction is at the center of his approach, and according to investment bank UBS, two chip giants that might become Intel's future customers are NVIDIA and Broadcom. UBS' note hit the wires yesterday afternoon, and it built on earlier speculation of Lip-Bu's interest in acquiring customers for Intel's foundry business.
Intel CEO Will Focus On Getting NVIDIA & Broadcom "Over The Finish Line," Says Investment Bank
Ahead of Lip-Bu's appointment as Intel's top executive, speculation was rife in the market about Intel spinning off its foundry business. However, as soon as he took over, the executive stressed that he would build Intel into a world class foundry and put to rest any rumors about a spin off for the time being. Intel has struggled to compete with Taiwan's TSMC when it comes to making chips for others, and according to UBS, Lip-Bu might bring on NVIDIA and Broadcom as clients.
The investment firm's analyst Tim Arcuri notes that NVIDIA is more likely to become an Intel customer rather than Broadcom. However, he notes that Intel likely won't manufacture NVIDIA's AI GPUs as the first orders. Instead, the firm will manufacture NVIDIA's gaming GPUs.
Intel is struggling with power consumption of its manufacturing processes, according to Arcuri. The analyst believes that the firm will "push aggressively to get a lower power version of 18A (18AP) to market that will be more attractive to customers than 18A has been."
However, while Intel will focus on winning NVIDIA as a foundry customer, the firm's 18A process is nevertheless struggling with power consumption requirements. Additionally, the analyst also believes that Intel can leverage its packaging processes to resemble TSMC's CoWoS packaging. Packaging constraints have hampered AI chip production and forced Taiwan's TSMC, the world's leading AI chip manufacturer, to invest in new facilities to keep up with demand.
Intel's shares are up by 15% year-to-date primarily on the back of Lip-Bu taking over. The share had gained 35% by mid-February on the back of speculation that its chip division might be acquired by TSMC due to the Trump administration's focus on bringing advanced chip manufacturing to the US. However, they shed these gains and were down by 2% year-to-date ahead of Lip-Bu's appointment.
Arcuri also believes that it might be possible for Intel to supply Apple with chips. Apple relies primarily on TSMC for its application processors and other chips for notebooks, smartphones and tablets. However, the UBS analyst cites Intel's partnership with Taiwan's United Microelectronics (UMC), which could "make INTC/UMC a valuable 2nd source for high voltage FinFET after TSMC and could yield a potential ramp into an Apple product next year."
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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