TSMC N2 becomes the top choice, NVIDIA presses the pause button on Intel's 18A—A new signal in industry competition

Intel’s foundry ambitions are facing a critical test. Recent supply chain developments reveal that as the global leader in AI chips, NVIDIA has shifted its focus for next-generation products to TSMC’s N2 process, adopting a “wait-and-see” attitude toward Intel’s 18A process plan. This shift reflects a pragmatic choice in the competition for advanced manufacturing processes.

Why choose N2 over 18A—considerations of stability

NVIDIA’s move is not a hasty decision. Although the company previously invested $5 billion in Intel to create a domestic manufacturing capacity alternative in the U.S., ensuring supply stability has become the top priority at this critical product mass production stage. TSMC’s N2 process has been market-verified, with mature yield data and stable delivery capabilities, whereas Intel’s 18A still needs to prove its reliability in real-world applications.

From a business logic perspective, NVIDIA’s delay strategy is not a complete abandonment of Intel but a form of “technical waiting.” If Intel can demonstrate stable yields for 18A through its own products (such as the Panther Lake series) by 2026, this door remains open.

The real challenges facing Intel 18A

This decision puts significant pressure on Intel. As the ultimate goal of the “four-year, five-node” strategy, 18A was expected to gain endorsement from top global customers to validate its technological feasibility. Losing support from the AI chip leader means Intel must turn to application vendors like Microsoft and Amazon to fill initial capacity gaps. This presents challenges for return on investment and market confidence.

14A process: the next battleground

The real focus has shifted to Intel’s more advanced 14A process. Industry analysts point out that NVIDIA’s pursuit of a “second supplier” strategy is now a certainty, but only if this process can achieve performance-per-watt (PPA) and reliability levels competitive with TSMC.

If Intel cannot deliver convincing performance-per-watt results with 14A before 2026, NVIDIA’s current “delay” could evolve into a permanent termination of the technology selection. This is not only NVIDIA’s decision but also an objective test of the manufacturing capabilities of the entire AI industry.

Industry implications

This contest highlights a new reality: advanced process technology is no longer just about technical leadership but also about reliable delivery. For Intel, whether 18A can pass the Panther Lake validation will be critical, and 14A is the last opportunity to prove its future competitiveness.