Intel stock was climbing early Wednesday. A chip-sector rally was being reinforced by progress on manufacturing.
The shares were up 3.9% at $121.60 in premarket trading. The chip company was recouping some of its losses from the previous day when it fell 8.5% amid a slump in technology stocks.
The company said late Tuesday that it has entered "risk production" for the 18A-P variant of its 18A manufacturing process. That means it can start trial production runs as it looks to sign up major external customers.
Intel said 18A-P can make chips that run 9% faster using the same amount of power, or cut power use by 18% while keeping the same speed, when compared with its standard 18A process. Intel is aiming to attract outside customers to use the process and therefore offset the billions of dollars worth of quarterly losses it is booking in its foundry, or chip-manufacturing unit.
A $5 billion investment from Nvidia had raised hopes of a major chip-manufacturing deal but so far there has been no indication that the artificial-intelligence chip leader will commit to using Intel's foundry.
The other big potential customer is Apple, which was reported by Bloomberg last month to be holding exploratory discussions with Intel over chip manufacturing. Intel and Apple declined to respond to requests for comment at the time.
Analysts at Counterpoint Research suggested Apple will likely test Intel's 18A-P process for making its next-generation M7 processor for its Mac and iPad devices but there's no guarantee it can match the impressive yield -- or percentage of working chips -- that regular Apple supplier Taiwan Semiconductor Manufacturing can achieve.
"Apple trialling its M7 on Intel's 18A-P will be a turnaround moment for Intel's foundry ambitions. But yield matters more than nodes. Matching TSMC's manufacturing consistency will be the make-or-break factor," Counterpoint Research analysts wrote.
