[Chip Talk] NVIDIA Reaches Out to Intel: Will It Shake Up the Foundry Market?

‘AI Powerhouse’ NVIDIA Emerges as a Major Intel Shareholder
NVIDIA Gains Foundry Alternatives Beyond TSMC
Samsung Secures Big Tech Clients, Kicking Off Full-Scale 2nm Race This Year

NVIDIA has strengthened its strategic relationship with Intel by acquiring a stake in the company. As NVIDIA, which seeks to diversify its supply chain, now has the option to utilize Intel’s foundry (semiconductor contract manufacturing) services, a significant shift in the market is anticipated. This is expected to pose a new challenge for Samsung Electronics, which is striving to catch up with TSMC.

According to the semiconductor industry on January 10, NVIDIA recently purchased approximately 214.7 million shares of Intel. Previously, in September of last year, NVIDIA agreed to acquire Intel’s common shares at $23.28 per share. The total acquisition amounted to $5 billion (about 7.26 trillion won), making NVIDIA a major shareholder with roughly a 4% stake in Intel.

Jensen Huang, CEO of NVIDIA, is delivering the keynote speech at the NVIDIA CES 2026 Live held at the Fontainebleau Hotel in Las Vegas, Nevada, USA, on the 5th (local time). Photo by Yonhap News

On the surface, this transaction aligns with the Trump administration’s policy of “saving Intel.” It is viewed as a measure to provide financial relief to Intel, which has faced increased financial burdens due to years of strategic missteps and large-scale facility investments. Industry insiders see this as a move by NVIDIA, which has long relied heavily on Taiwan’s TSMC for manufacturing its graphic processing units (GPUs) and other artificial intelligence (AI) chips, to begin seriously diversifying its supply chain.

With this investment, NVIDIA is expected to lay the groundwork for combining its AI technology with Intel’s “x86 architecture.” Although the contract does not explicitly mention foundry-related cooperation, the strong equity relationship now gives NVIDIA the option of using Intel’s foundry services. This raises the possibility that, beyond simple design collaboration, some AI chip manufacturing could be shifted to Intel.

The key focus in this year’s foundry market is the 2-nanometer (nm) process (1 nm = one billionth of a meter). TSMC, which raised its market share to 71.0% in the third quarter of last year, continues to increase prices on the back of strong demand for cutting-edge chips. In addition to capacity saturation, geopolitical risks such as the threat of a Chinese invasion of Taiwan and production disruptions from earthquakes have heightened NVIDIA’s need to diversify its supply chain.

Samsung Electronics maintains second place with a 6.8% market share, but the gap with third-place Chinese SMIC (5.1%) is not large. There are concerns that Samsung could be the most threatened if Intel begins securing orders from NVIDIA. Previously, Intel received $5.7 billion (about 8.28 trillion won) in support from the U.S. government through a “stake acquisition” method and is preparing to mass-produce its 18A (1.8 nm-class) process.

Samsung Electronics is aiming for a rebound this year by securing major big tech companies as clients. The company has started production of its mobile application processor (AP) “Exynos 2600” based on the 2 nm process and plans to install it in its upcoming flagship smartphone, the Galaxy S26. In July of last year, Samsung also signed a record-breaking contract worth 23 trillion won with Tesla to produce autonomous driving chips, among other products. In August of the same year, Samsung succeeded in winning orders from Apple for image sensors for the iPhone.

Recently, it has been reported that Samsung is likely to win an order for 2 nm chips from AMD, and there are also expectations of a partnership with Qualcomm. Qualcomm is expected to entrust production of its next-generation AP to Samsung. Among foundry companies, Samsung was the first to begin discussions with Qualcomm, and if a deal is reached, Samsung will resume production of Qualcomm’s cutting-edge products for the first time in five years since 2022. Previously, Qualcomm entrusted AP production to Samsung Foundry until 2021, but later switched to TSMC.

The changes in the foundry market landscape, triggered by NVIDIA’s involvement, are expected to present a challenge for Samsung Electronics. Samsung’s 2 nm yield is estimated to be around 50-60%. Since Intel’s 18A yield is reportedly around 10%, Samsung is generally considered to have a technological advantage. However, NVIDIA is under significant pressure from the U.S. government, so it is possible that Intel could become a priority alternative to TSMC.

An industry insider commented, “NVIDIA’s advanced GPU production is virtually concentrated at TSMC, but the equity investment in Intel has created a subtle tension. While Samsung Electronics is far ahead of Intel in terms of process maturity and yield, considering factors such as U.S. government policy support and investment capacity, there is a possibility that a certain level of competitive structure could emerge in the mid- to long-term.”