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Intel shares powered higher in early Monday trading following reports that both Nvidia and Broadcom are looking to test the chipmaker's advanced AI production techniques in what could be an early and important endorsement of its nascent turnaround plans.
Intel (INTC) has been actively advancing plans to spin-off its Intel Foundry Services (IFS) business into a stand-alone entity, while retaining its high-end chip design and marketing division, even after the sacking of CEO Pat Gelsinger late last year.
Those plans appear to have won the support of President Donald Trump, whose administration is reportedly working to bring Taiwan Semiconductor Manufacturing Co TSMC into a joint venture that would keep IFS based in the United States.
On the contract manufacturing side, Reuters reported Monday that both Nvidia (NVDA) and Broadcom (AVGO) are testing Intel's advanced 18A techniques to determine if they're suitable for a long-term agreement to build AI-powering chips and processors.
The group has also signed earlier deal with Amazon (AMZN) and Microsoft (MSFT) .
Last week, Nvidia described the "extraordinary" demand for its Blackwell processors, and forecast current-quarter revenues in the region of $42 billion. Broadcom reports December-quarter earnings later this week.
Successful testing could lead to valuable contracts for Intel as its executes the split of its foundry business which has been a drag on Intel's overall valuation, while simultaneously enhancing the worth of any stand-alone chip design company with close ties to the new fab business and likely support from Chips Act funding.
The group's broader focus, now being managed by interim co-CEOs David Zinsner and Michelle Johnston, is aimed at scaling its business across the AI spectrum by making chips that power next-generation laptops and those that support processors for client-based servers.
Related: Analyst reworks Intel stock price target amid new spinoff reports
That said, Intel is facing 18A system delays that won't allow it to ramp production until the middle of this year, with the foundry division unlikely to breakeven as a stand-alone group until at least 2027.
"We're going to systematically attack our costs and remain highly focused on our goal of delivering breakeven operating income for Intel foundry by the end of 2027, and we expect to demonstrate improvements this year," Intel's finance chief David Zinsner told investors on Jan. 30.
"Beyond 2027 ... I remain very optimistic on our opportunity at Intel foundry," he added. "The pervasive growth of AI is driving accelerating and unprecedented demand for silicon, and there continues to be an unmet need for greater choice and overall manufacturing capacity in the industry today."