Intel looking likely to manufacture Nvidia chips

More than a year ago, Nvidia CEO Jensen Huang said he was open to the possibility of having Intel manufacture Nvidia’s GPUs through Intel’s foundry services program.

At the time, Huang was noncommittal beyond saying that Nvidia was looking at the possibility. Now things are getting more concrete. During a question-and-answer session at the Computex tradeshow in Taipei, Taiwan, Huang said he had recently received good results for an Intel test chip based on the company’s next-generation process node.

“You know that we also manufacture with Samsung, and we’re open to manufacturing with Intel. [Intel CEO Pat Gelsinger] has said in the past that we’re evaluating the process, and we recently received the test chip results of their next-generation process, and the results look good,” Huang said.

The fact that they are now at the point of test chips indicates Nvidia is further along the process than expected and could be getting close to a final product. But there still are a lot of unanswered questions.

Huang didn’t specify which of Nvidia’s architectural designs the test chips were built on, or which process node was tested. Intel is currently manufacturing chips on what it calls Intel 4 (4nm transistors), with Intel 3 (3nm transistors) due later this year. Intel 20A (2.0nm) and Intel 18A (1.8nm) are due next year.

Huang also said that Nvidia’s supply chain is designed for “maximum diversity and redundancy so that we can have resilience,” and “we manufacture in as many places as we can.”

But the fact is, Nvidia is extremely dependent on manufacturing by TSMC, which is based in Taiwan. With the Chinese government making no secret of its ambition to take control of the island and repeated threats of war, finding a chip supplier outside of Taiwan has become a priority not only for Nvidia but also for other TSMC customers.

Even if TSMC wasn’t worried about a potential Chinese invasion of Taiwan, it is still massively overstretched and at capacity. Not only that, but chip manufacturing requires an immense amount of fresh water, and Taiwan has been through a brutal drought in recent years, making manufacturing that much harder.

So it is as essential for TSMC to diversify as it is for its customers, for different reasons. It is building new factories in Japan and in Phoenix, Arizona, but those won’t come online until late next year at the earliest. Working with Intel would give Nvidia a manufacturing partner with the capacity it needs and fabs that are not in potential war zones.

In the end, having Intel as its manufacturer could ensure a healthy supply chain for Nvidia and reduce its exposure to supply chain issues and problems.